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Reported by The Block: The overall cryptocurrency market capitalization sits at around $2.86 trillion on Tuesday.
Daily liquidations on futures exchanges that track the price of bitcoin hit $227 million on Monday, the third-largest amount since September 2024.
Financial markets across the board experienced a steep selloff over the past 24 hours, with the overall cryptocurrency market capitalization falling to a three-year low. U.S. President Donald Trump said tariffs on imports from Canada and Mexico "will go forward" next week, spooking traders and investors across all industries.
The total crypto market cap dropped about 8% to around $2.86 trillion on Tuesday afternoon, according to CoinMarketCap, which puts it near levels last seen in November 2021. The price of bitcoin — the world's largest cryptocurrency — was down 8% to $86,700, its lowest level since this past November. Ether, XRP and solana were all down between 8-10%.
"History has shown that crypto markets react to macroeconomic shifts much like traditional assets, but they also bounce back with remarkable resilience," Binance CEO Richard Teng wrote in a post on X. "What we are witnessing now is another short-term tactical retreat, far from a structural decline. Price movements often overshadow what's happening beneath the surface, but the core drivers of crypto's growth remain firmly intact."
A closer look at the data reveals a notable trend between Bitcoin and the broader crypto market. In November 2021, bitcoin's market dominance was approximately 41%, but it has since surged to around 61%. Meanwhile, ether's share has declined from 20% to 10%.
Additionally, the market share of cryptocurrencies outside the top nine, categorized as "others," has shrunk from 25% to 9%, according to CoinGecko data. This shift suggests that while bitcoin has gained ground, ether and lower-cap assets have declined over the past three years, leading to little overall progress.
“While Bitcoin trades relatively well within the digital asset complex, it is now caught up in the Solana meme coin-driven selloff and now the broader risk-off nature of markets,” Standard Chartered Global Head of Digital Assets Research Geoffrey Kendrick wrote in a note. This point was echoed by a prominent crypto asset manager.
"What crypto is digesting right now is the end of the memecoin boom," Bitwise CIO Matt Hougan said in a post on X. "The combination of Melania, Libra, and the Lazarus Group using memecoins to launder stolen ETH will kill it dead. Maybe not today, but within 6 months."
The recent selloff accelerated last Friday after Lazarus, North Korea’s state-backed hacking organization, executed the largest-ever breach of a centralized crypto exchange, stealing over $1.5 billion in ETH and ETH-based tokens from Bybit. That came shortly after Argentine President Javier Milei promoted the LIBRA memecoin on social media, which quickly led to a 95% drawdown of its bloated $4.5 billion valuation.
There are things ready to replace this memecoin explosion, Hougan noted, including the institutional adoption of bitcoin, stablecoins and a rebirth in DeFi. "But until they start making their presence felt, the loss of energy will create a drag on the market," he said.
Daily liquidations on futures exchanges that track the price of bitcoin hit $227 million on Monday, the third-largest amount since last September.
The GMCI 30, which represents a selection of the top 30 cryptocurrencies, is down 6% over the past 24 hours and 26% over the past month. U.S. spot Bitcoin ETFs witnessed $516 million in net daily outflows on Monday and those ETFs are down another 6% on Tuesday.
Meanwhile, the U.S. regulatory landscape also took another small step in its embrace of the crypto industry. The U.S. Securities and Exchange Commission dropped its investigations into Uniswap Labs days after the agency ended similar probes into other major players such as Coinbase and Robinhood.
"Its true that market pullbacks can feel unsettling," Binance's Teng said. "But they are also moments where seasoned investors position themselves for the next uptrend. Crypto has matured into an asset class integrated with global finance. Its ability to rebound from macro-driven dips has been proven."
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