The value of the cryptocurrency market on Monday fell below US$1 trillion for the first time since January 2021, according to data site CoinMarketCap, reaching as low as $926 billion.
The global cryptocurrency market peaked at US$2.9 trillion in November 2021, but it has faltered so far this year.
It has lost US$1 trillion in value in the last two months alone as investors ditched riskier assets in the face of high inflation and fears that interest rate raises by central banks will hamper growth.
The largest cryptocurrency, bitcoin, was down more than 10 per cent on the day, falling to an 18-month low of US$23,750. It is down by around 50 per cent so far this year. Smaller coin ether fell over 15 per cent to US$1,210.
“As inflation proves to be an even trickier opponent to beat than expected, Bitcoin and Ether are continuing to get a severe bruising in the ring,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
“They are prime victims of the flight away from risky assets as investors fret about spiraling consumer prices around the world.”
(Reporting by Elizabeth Howcroft; editing by Tom Wilson)