$1 Trillion Meltdown in Crypto: Reason Revealed
Total Market, which represents the total value of all cryptocurrencies in the crypto market, decreased by $919.86 billion in the first half of this year to $2.03661 trillion.
In the first half of the year, rising geopolitical tensions due to the US/Israel-Iran War, increasing inflationary pressures, central banks' moves toward tight monetary policies, increased demand for the dollar, and rising bond yields caused investors to exit risky assets.
Thus, while selling pressure was prominent in many risky assets, from stock exchanges to commodities, the cryptocurrency market was among the asset groups most exposed to this selling pressure.
The persistence of expectations that the US Federal Reserve (Fed) will raise interest rates and pricing for at least one rate hike this year are among the leading reasons for the declines in the cryptocurrency market.
Speculative assets that do not generate yield, like cryptocurrencies, generally underperform in high interest rate environments. Rising bond yields and interest rates increase the opportunity cost of investing in crypto.
On the other hand, institutional capital flows can be more decisive in the direction of the cryptocurrency market than individual investors.
The reduction in bitcoin purchases by corporate companies also contributed to this selling pressure.
BITCOIN FELL 33%
Total Market, which represents the total value of all cryptocurrencies in the crypto market, decreased by approximately $919.86 billion in the first half of this year, from $2.95647 trillion to $2.03661 trillion.
Bitcoin, which was $87,524.9 on December 31, 2025, fell to $58,635.1 in June. Thus, Bitcoin lost 33% of its value in the first half of the year.
Ethereum also fell 47% in the first half of the year, from $2,976 to $1,575. Ethereum saw its lowest level since April 2025 at $1,505.7 in June.
"THE CRYPTOCURRENCY MARKET IS NOT PRICED ONLY BY ITS OWN INTERNAL DYNAMICS"
Blockchain and Crypto Asset Strategist Mete Ali Başkaya, in a statement to AA correspondent, said that it would not be correct to attribute the severe selling pressure in the cryptocurrency market in the first half of the year to a single reason.
Başkaya emphasized that the Fed keeping interest rates high, tight global liquidity conditions, outflows on the spot ETF side, weakening institutional investor demand, and the simultaneous pricing of geopolitical risks, especially the US-Iran tension and concerns about energy supply through the Strait of Hormuz, are suppressing global risk appetite.
Başkaya, pointing out that the unwinding of leveraged positions within the crypto market also accelerated the decline, noted the following:
"While Bitcoin remained relatively more resilient, the loss of liquidity was felt more sharply on the Ethereum and altcoin side. This process shows us that the cryptocurrency market is now priced not only by its own internal dynamics, but together with Fed policy, ETF flows, dollar liquidity, geopolitical risks and institutional capital movements. I see this period not as the end of the cryptocurrency market, but as a more mature correction process where the market makes a quality distinction. For a lasting recovery, we need strong ETF inflows again, a softer Fed expectation, a reduction in geopolitical tension, and a new confidence story to come to the market."
Source: AA | This content was published by Hande Dağ
