Bitcoin declined nearly 13% in the last week, though it recovered Mondays lost value before midnight
Ethereum briefly fell below $1,300 Monday before reclaiming some losses to end up 4.5% over a 24-hour period
Many experts claim global macroeconomic concerns fed into cryptos most recent crash
Market proponents also hold that Ethereums recent Merge and the specter of crypto regulations impacted prices
The newly-minted ETHPoW coin fared worst, shaking off nearly half its valuation in just hours.
By 11pm EST, the worst of the days carnage had ceased. The global crypto market cap rose from some $914 billion to hover around $940 billion as market wariness petered.
Bitcoin recovered to around $19,460, minimizing its weekly decline to just 12.7% as its 24-hour gains topped 3.2%. Ethereum regrouped at $1,365, rising 4.5% in the prior 24 hours despite plunging 20% in the last 7 days. The rest of the market largely stabilized, though some volatility was present late into the evening.
Experts largely believe the answer for Mondays cryptocurrency pop lies scattered across 2022s timeline.
Declining macroeconomic conditionsincluding decreased market support from the Fed, higher interest rates and the ongoing Russia-Ukraine conflicthave all played their part in this years volatility.
Repeated reports of stubborn CPI inflation data, including Augusts, have panicked investors worried about fading purchasing power and looming recession. Many fear that the Federal Open Market Committee will use Augusts inflation and jobs data to justify a higher-than-expected rate hike this week.
Since January, risky assets like stocks and cryptos have suffered, while the Nasdaq Composite remains entrenched in a bear market. Bitcoin and ethereum have both plunged over 60% since January.
But the long-running and highly anticipated nature of these events doesnt fully explain why crypto took a sudden nosedive with no new information.
Enter The Merge.
Ethereums blockchain merge, or just The Merge, was a long-awaited event in the crypto world. The Merge moved Ethereum from an energy-intensive proof-of-work consensus mechanism to a more environmentally-friendly proof-of-stake mechanism.
Prior to last week, Ethereum relied on a proof-of-work (PoW) consensus mechanism to verify transactions, mint coins and secure the network. PoW relies on a network of computers, or nodes, racing to solve complex math puzzles. The first to cross the finish line adds a block to the blockchain and may receive a reward (usually crypto).