According to data from digital asset manager CoinShares, cryptocurrency outflows reached all-time highs in the first week of 2022.
Bitcoin
Bitcoin, the world’s most popular and expensive cryptocurrency by market capitalization, fell slightly Wednesday to $41,669. Since the start of the new year, the price of bitcoin has dropped by about 10%. Meanwhile, according to CoinGecko, the worldwide cryptocurrency market capitalization has dropped by more than 1 percent to $2.04 trillion.
Ether
Ether, the second-largest cryptocurrency and tied to the Ethereum blockchain, has lost almost 2% to $3,059, according to CoinDesk. Dogecoin prices dipped approximately 5% to $0.14, while Shiba Inu prices rose over 6% to $0.000026. Binance Coin, presently priced at $423, has lost over 2%. Meanwhile, Binance Coin, which is currently trading at $423, has fallen more than 2 percent.
Other cryptocurrencies
Many other digital currencies have had mixed performances over the last 24 hours, with some losing value while others gained.
CoinShares, a digital asset management, reported record net withdrawals of $207 million in the first week of 2022. In four consecutive weeks since mid-December, the sector has lost $465 million, or 0.8 percent of total assets under management.
The Federal Reserve’s tightening of monetary policy affects risk assets like cryptocurrencies because it reduces liquidity and increases market volatility.
During the week ending January 7, Bitcoin, the world’s most valuable cryptocurrency, lost $107 million. Last week, Ethereum-based assets lost $39 million, making it five weeks in a row that they have lost $200 million.
At present, investors appear to be shifting away from growth-oriented investments and toward safer alternatives. Once again, the Nasdaq is leading the losses among the major indices in the stock market. Based on last week’s Fed meeting minutes, growth investors are now pricing in much faster rate increases.
Investor sentiment in the cryptocurrency market is showing signs of severe fear. This is because meme tokens rely on good mood and investor interest, and investors foresee an exponential surge in 2022.
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