Cryptocurrencies have struggled in recent weeks, with many investors seeing significant losses during that period.
The cryptocurrency market lost nearly $300 billion over the past week. Total market capitalization fell from about $1.5 trillion last week to just over $1.2 trillion at present.
Sam Bankman-Fried, CEO of the FTX crypto exchange, believes the market will not collapse to zero. In a recent interview with Fortune, Bankman-Fried said he expects cryptocurrencies to recover alongside stocks.
FTX’s CEO has seen his net worth drop by almost 50% in recent weeks and is now estimated at around $11 billion, according to Bloomberg’s Billionaires Index. He commented:
“Crypto markets have mostly tracked what’s happening in traditional markets. So if stocks recover, I would expect crypto to follow. If stocks continue to crash, then BTC might too.”
Several cryptocurrency analysts have noted that recent crypto performance mirrors that of U.S. technology stocks. With NASDAQ 100 names underperforming, the crypto market has also been in a downward trend.
According to The New York Times, the 30-day average of the Bitcoin–Nasdaq correlation has approached a nearly one-to-one relationship since January 1, briefly reaching 0.82 earlier this week.
Equity and crypto markets have been moving in sync in recent months, and that correlation could continue for a while.
The Terra crisis dealt additional blows to the crypto market, with billions wiped out from the project. The Terra blockchain was temporarily halted, and the broader market has since shown signs of recovery.
At the time of writing, Bitcoin is trading back above the $30,000 resistance level while Ether remains above $2,000. Total crypto market capitalization sits near $1.3 trillion and could climb higher in the coming days if the recovery continues.