Crypto Market Has Returned to Post-Terra-Collapse Levels

The total value of all crypto in circulation reached a peak of $1.26 trillion on Friday — the highest level in more than 10 months

article-image

Source: Shutterstock / kathayut kongmanee, modified by Blockworks

share

The value of all crypto in circulation has been consolidating following Friday’s nudge higher to levels not seen since around the time failed algorithmic stablecoin project Terra collapsed in May 2022.

Total market capitalization reached a peak of $1.26 trillion, retracing slightly to $1.23 trillion as of Monday. That’s the highest point since last June, in the aftermath of a harrowing month for the crypto market which witnessed the fall of Terra’s digital assets ecosystem.

“Although the sector is currently not large enough to cause systemic risks, we must not forget about the collapse of Terra Luna, Celsius and FTX,” Keith Choy, Interim Head of the Intermediaries at Hong Kong’s SFC said in a keynote address during a Web3 conference last week. “Such failures underscore how critical it is to regulate this industry.”

The Terra crisis, brought about by a severe de-pegging of its algorithmic stablecoin UST, led to investor losses totaling more than $40 billion. It ended any aspirations for a quick market recovery following a 40% drawdown from the November 2021 peak when the price of bitcoin (BTC) hit $69,000 and the total crypto market capitalization topped $2.9 trillion.

Terra’s fall precipitated a market cap breakdown from about $1.6 trillion to $800 billion over the course of a month. The collapse of other major firms later in 2022, culminating in the demise of FTX in November, forced the market to its lowest point in two years at $730 billion.

While a timeline for regulatory certainty remains hazy, at least in the US, other jurisdictions such as Hong Kong are attempting inroads to ensure the specter of 2022’s failings don’t cause investors further harm.

US investors in the bitcoin futures market are also demonstrating consistently positive bias, according to a report last week by investment management firm NYDIG. 

The annualized rolling 1-month futures basis, which measures the difference between futures trading on the CME and spot bitcoin, has remained positive for US investors. It suggests US investors are more bullish on bitcoin compared to their international peers, the firm said.

The uplift in digital assets has also attracted larger allocations of capital to bitcoin, as its dominance — or total share of the crypto market — is now at its highest point since June of last year at 47%, but at a level which has been rejected on five prior occasions over the past 2 years.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates (2).png

Research

We’re bullish on the PUMP token. We believe Pump.fun's brand strength, existing integrations, product roadmap, and strategic levers justify PUMP's TGE valuation, and expect the token to re-rate meaningfully higher in the months ahead.

article-image

Big blockers wasted a bitcoin fortune trying to prove a point

article-image

Coinbase’s newest acquisition includes the CEO and Head of Research from Opyn

article-image

Crypto’s highest purpose might be to make markets better by making them bigger

article-image

The non-profit’s “Project Open” seeks to let stocks trade directly on Solana

article-image

The acquisition is Pump.fun’s first, and comes just days before its planned ICO

article-image

As Trump’s tariff war reignites, everyone is assuming the dollar will continue its path lower. But the journey might be bumpy