Crypto Market Loses 60% of Market Cap — Analyzing the Causes

• The cryptocurrency market has seen a 60% drop in its market cap from its all-time high, while the S&P 500 is only 15% away.
• NVidia’s $2.3 billion short seller losses may not be as bad as they seem, with short sellers having enough collateral deposits to keep the trade open.
• China’s reluctance to issue stimulus packages could weaken global economies, causing further drops on the markets.

Crypto Market Drop

The cryptocurrency market has lost 60% of its market cap since its all-time highs, with Cointelegraph analyst and writer Marcel Pechman explaining why this is so. The S&P 500, on the other hand, is only about 15% from its all-time high.

NVidia Short Seller Losses

NVidia’s $2.3-billion short seller losses don’t provide the full picture according to Pechman – as long as there are enough collateral deposits, those losses are still open much like buyers who paid too much for their crypto assets but haven’t closed the sale yet – meaning that their losses aren’t concrete yet either. Bloomberg reported that Nvidia was the fourth most shorted stock in the US after Apple, Tesla and Microsoft; however these same stocks were also top 10 S&P 500 components which means that these short sellers may have been neutralizing their positions by buying index futures and selling individual stocks.

China’s Economic Growth

China recently reported a 5% growth rate which disappointed investors and will likely cause further drops on markets due to their reluctance to issue new stimulus packages – a strategy meant to weaken global economies even more.

Alternative Risk Assets

For Bitcoin (BTC) at $27 222 and Ether (ETH) at $1 841 to be properly understood, they must be considered alternative risk assets rather than commodities or foreign exchange currency; furthermore mutual funds cannot hold crypto assets. This means that it will continue trading based on investor sentiment rather than fundamentals which would explain why it hasn’t been able to break new highs recently despite positive news or developments in the sector such as DeFi protocols or institutional investors entering into the space.


In conclusion, investor sentiment plays a huge role in how cryptocurrencies trade currently and this explains why we have seen a 60% drop since all-time highs despite positive news within the sector; NVidia’s recent losses are part of this sentiment which shows just how volatile crypto can truly be; additionally China’s refusal to issue new stimulus packages could weaken global economies even more leading to further drops on markets worldwide.