Cryptocurrency assets are facing a tough challenge these days after the latest negative market sentiment. The total market cap of digital currencies dropped below $1.4 trillion on Monday.
According to the latest data published by Coinmarketcap, Bitcoin, the world’s largest cryptocurrency, crashed below $34,000 today. As of writing, the total market of BTC stands at around $640 billion.
The cryptocurrency market has been in a downtrend for the last five weeks. On 12 May 2021, the overall value of digital assets topped $2.6 trillion, which is the highest level on record. The market cap dropped significantly in the following weeks and touched a low of approximately $1.25 trillion on 24 May.
There were several reasons behind the latest sell-off in the cryptocurrency market. Analysts termed the recent crypto ban announcement by China as the main driver. Additionally, Elon Musk, CEO of Tesla, criticized Bitcoin for its environmental impact in the last few weeks.
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“The dominant driver of Bitcoin right now is the crackdown on mining & trading in China that began in May. This created a forced & rushed exodus of Chinese capital & mining from the Bitcoin network, a tragedy for China and a benefit for the Rest of the World over the long term,” Michael Saylor, CEO of MicroStrategy, said in a Tweet on Saturday.
According to the recent data by crypto analytics firm, Santiment, cryptocurrency whale accounts are still accumulating digital currencies in large amounts despite the latest sell-off. “Bitcoin has dropped to $34,000, revisiting levels last seen June 12th. Whale holders (at least 1,000 BTC addresses) continue to show a pattern of accumulation, and mid-tier holders (10-1,000 BTC) aren’t flinching,” Santiment highlighted.
The recent drop in the cryptocurrency market has caused a major dip in the total value of Grayscale’s digital assets under management (AUM). The US-based asset management firm now has nearly $34 billion worth of crypto AUM, which is a significant drop from over $50 billion in May 2021.