Bitcoin continued its slide overnight, with the leading cryptocurrency by market cap slipping to a new 52-week low of $20,184, according to data from CoinMarketCap.
The top cryptocurrency has lost a third of its value over the past week amid rising inflation rates and an anticipated rate hike from the U.S. Federal Reserve.
The market capitalization of Bitcoin has tumbled from $1.27 trillion in November 2021 to under $386 billion today.
Ethereum (ETH), the second-largest cryptocurrency, is down over 15%, and is currently trading at $1,029.
With a current market capitalization of $128.79 billion, Ethereum has lost almost 80% of its value since its all-time high of $4,891.70 recorded in November 2021, according to CoinMarketCap.
Why is crypto crashing?
The primary reasons behind today’s bearish action are the upcoming federal rate hike to control inflation, increased crypto fund outflows and reduced decentralized finance (DeFi) activity.
With inflation rates peaking at 8.6% in the United States, the Fed is expected to make an announcement regarding a possible rate hike later today.
Last week, a total of $102 million was pulled out of digital assets indicating investor concerns about uncertainties in digital asset investments.
The Total Value Locked (TVL), across all blockchains including Ethereum, Tron, BNB Chain, Avalanche, and Solana has fallen by over 8% over the past 24 hours, according to data from DefiLlama.
DeFi lending protocols Aave, Lido, and Compound have lost at least 30% of their TVL over the past week, following concerns over liquidity on rival DeFi lending protocol Celsius.