Cryptocurrency market capitalization dived below $1 trillion on Monday for the first time in 17 months, as record-high inflation around the world and the US Federal Reserve's hawkish stance continue to present risks for investors.
The total value of the cryptocurrency market plummeted to $925 billion at 0505GMT. Although the value later bounced back, it again fell to $998 billion at 0805GMT, according to data from the digital asset price-tracking website CoinMarketCap.
This marks the first time since January 2021 that the cryptocurrency market has seen its total capitalization going below the $1 trillion level.
The price of Bitcoin, the world's largest crypto by market size, fell to as low as $24,685.36 before 0830GMT. Ethereum, the world's biggest altcoin by market value, plummeted to $1,266.28. Both digital assets were down more than 10% for the day.
While Bitcoin fell over 20% during the past week, Ethereum lost around 33% of its value.
The record-high inflation in the world and the Fed's aggressive interest rate moves have caused crypto investors to adopt a risk-aversive stance.
After 25 and 50 basis points of rate hikes in March and May, respectively, the Fed is widely expected to hike rates another 50 basis points in each of its next meetings on Wednesday and in July.
Several Fed officials in recent weeks have also indicated that the central bank could make a 75 basis point rate hike in September to lower record inflation in more than 40 years.
US consumer inflation jumped 8.6% in May, compared to the same month a year ago, recording its highest annual increase since December 1981.