Crypto Downturn Erases $1.2 Trillion From Market

The recent cryptocurrency downturn has reportedly erased more than $1 trillion from the market.

That’s according to a report Tuesday (Nov. 18) from the Financial Times (FT), which cites information from data provider CoinGecko. The market value of the 18,000-plus coins monitored by the company has plunged 25% since a record high last month, wiping out roughly $1.2 trillion from their combined capitalization.

The price of bitcoin, the world’s largest cryptocurrency, fell more than 28% during the same period to $89,500, its lowest trading level since April, the report added.

“Despite all the institutional adoption and positive regulatory momentum, crypto market gains have now been wiped out on the year,” Brett Knoblauch, a crypto analyst at Cantor Fitzgerald, told the FT.

Adding to worries are new doubts about whether the Federal Reserve will lower interest rates next month, as well as the steep valuations of tech companies involved in the artificial intelligence (AI) investment wave, the FT said.

As the FT notes, this decline is a reversal for a market that had enjoyed record highs following President Donald Trump’s promise to make the U.S. the world’s crypto capital, naming a pro-digital asset chairman to the Securities and Exchange Commission (SEC).

However, the report added, it was the president himself who helped trigger this new downturn, with a surprise tariff announcement in October leading to historic levels of liquidation across the crypto market.

“What we are seeing now is not a collapse in crypto markets. It is the extended aftershock of October’s liquidation event,” said David Namdar, CEO of CEA Industries, a vaping company that earlier this year began purchasing large quantities of a token issued by Binance.

This news follows a report from Bloomberg Monday (Nov. 17) about the sharp drop in so-called “altcoins,” seen as the lowest-level, highest-risk crypto tokens.

That report cited data from the MarketVector Digital Assets 100 Small-Cap Index, which monitors the 50 smallest digital assets in a group of 100, and which had fallen to its lowest level since 2020 on Sunday (Nov. 16).

In other digital asset news, PYMNTS wrote last week about proposed crypto market structure legislation recently introduced in the Senate.

“For industry players, market participants and observers, the implications of a crypto market framework could be profound,” that report said. “The regulatory limbo that has dogged crypto firms, stemming from unclear jurisdictional boundaries between the SEC and CFTC, would finally be addressed.”