Bitcoin hits lowest level since January as equity markets hurt investors

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Bitcoin hits lowest level since January as equity markets hurt investors

HONG KONG Reuters -- Bitcoin fell to its lowest level since January on Monday as the slumping equity markets continued to hurt cryptocurrencies, which are currently trading in line with riskier assets like tech stocks.

The January low of $32,951 was tested in the morning, and the price of the digital currency dropped to as low as $33,266. A fall below that level would be its lowest since July of last year.

It then moved around $33,500, down 1.4%.

Matt Dibb, COO of Singapore-based platform Stack Funds, said that "everything withincryptocurrencies is still classed as a risk asset, and like what we've seen with the Nasdaq, most cryptocurrencies are getting pummelled."

The tech heavy Nasdaq fell 1.5% last week and lost 22% year to date, hurt by the prospect of persistent inflation forcing the U.S. Federal Reserve to hike rates despite slowing growth. Nasdaq futures were down a further 0.8% in Asia trade on Monday morning.

Dibb said other factors in the decline over the weekend - bitcoin closed on Friday around $36,000 - were the crypto market's notoriously low weekend liquidity and short-lived fears that an algorithmic stable coin called Terra USD UST could lose its peg to the dollar.

Stable coins are digital tokens pegged to other traditional assets, often the U.S. dollar.

UST is closely watched by the community because of the novel way in which it maintains its 1: 1 dollar peg, and because its founders have plans to build a reserve of $10 billion worth ofBitcoin to back the stablecoin, which could potentially spill over into the bitcoin markets.

The world's second largest criptocurrency, which underpins the ethereum network, fell as low as $2,421 on Monday, its lowest since February.