Cryptocurrency prices plunge further as stocks sell off
As a result of the selloff of riskier assets like stocks spread to cryptocurrencies, the price of digital currency fell further Saturday to levels not seen since August. It has lost 50% of its value since November, which is a record high in November.
The price ofBTCUSD fell as low as $34,042. It was 78 Saturday, a drop of 7.2%, before paring losses. Other digital assets slid, with Ethereum ETHUSD down 12%. According to Coinbase, Solana and Cardano each fell at least 17%.
The price of digital currency had already taken a major hit on Thursday night into Friday, when it fell from $43,000 to around $38,500. It took it to a low around $34,000 on Saturday, as it plunged even more on Saturday.
The leading coin has fallen 16.8 per cent over the last week. The price of ether has gone down 25 per cent, despite the fact that other coins have seen even more dramatic losses.
The price of digital currency has lost 23 per cent of its value in just three weeks, and anyone that bought it at the start of the year has seen it lose 23 per cent of its value.
The price of equities andBitcoin is affected by the pessimism that is seen to be increasing among investors and traders when it comes to riskier assets, according to Naem Aslam, chief market analyst at AvaTrade.
Aslam said that January also tends to be a volatile month because of the fact that when it starts to fall, the price action drops like there is no tomorrow.
Aslam cited a proposal by Russia's central bank on Thursday to ban the use and mining of cryptocurrencies. Russia is one of the world's leading mining locations and joins China, which imposed its ban on activity last year.
Supporters had hoped that the $40,000 level would be an important psychological barrier in the near future, and that the price could stabilise above that level. It dropped way below that, and continued to trade down.
Katie Stockton, the managing director of Fairlead Strategies, said in a Friday briefing that bitcoin holds support as it sets the tone for the criptocurrency space. Many altcoins are into support at their summertime 2021 lows.
The price is in danger of being down over the year because of the recent drop. This time in 2021, it was trading around $33,000, but days later it would see a price rally that would take it above $50,000 and see it perform strongly through most of the summer.
More than 600 billion dollars have been lost in the market value due to the decline of the digital currency from its peak, and over $1 trillion has been lost in the aggregate criptocurrency market.
The Biden administration is preparing to release an initial government-wide strategy for digital assets as soon as next month, according to Bloomberg News, and task federal agencies with assessing the risks and opportunities that they pose, according to people familiar with the matter.
The argument thatBitcoin is a form of digital gold is falling apart.
As the world's largest coin slips to $34,000, the lowest price since August, its decline in tandem with risk assets such as tech stocks is casting a shadow on a long-touted similarity to gold.
In a rocky start to the year, cryptocurrencies have plunged alongside equities amid tighter-than-expected monetary policy, while gold, often heralded as a store of value and an inflation hedge, has steadily traded upward this month.
Earlier this month, analysts from Goldman Sachs argued thatBitcoin could rise to a $100,000 price point if it could win more of the store-of-value market from gold. The signature volatility of the digital asset has come to fore.