The cryptocurrency market has seen a massive sell-off in recent weeks, with prices of major cryptocurrencies plunging to their lowest levels since 2020. Bitcoin, the most popular cryptocurrency, has fallen over 60% from its all-time high of around $69,000 in November 2021. Ethereum, the second largest crypto, has seen similar declines.

This rout in crypto markets comes as investors broadly flee risky assets amidst economic uncertainty and rising interest rates. The Federal Reserve has been aggressively hiking rates to fight surging inflation, sparking fears that tighter monetary policy could tip the US economy into a recession.

Cryptocurrencies have been especially hard hit by this flight from risk, as investors question whether digital assets should play a role in portfolios during times of volatility. Crypto is seen as more speculative than stocks and bonds, giving it a high-risk, high-reward profile. With liquidity drying up in markets, traders are looking to lock in profits from crypto's meteoric rise in recent years.

In addition to broad economic jitters, crypto markets have been rattled by crises specific to the asset class. The spectacular collapse of the TerraUSD and Luna tokens in May shook confidence in stablecoins. Lending platforms like Celsius Network and Voyager Digital froze customer withdrawals soon after, citing volatility. This has raised doubts about the viability of crypto finance models.

While long-term crypto believers still tout the potential of blockchain technology, even the most ardent supporters admit that short-term prices could continue to be rocky. Until macroeconomic uncertainty subsides, crypto will likely remain highly sensitive to swings in investor sentiment and appetite for risk. For now, the crypto bear market offers a sobering reminder that this emerging asset can carry steep downside as well as great upside