The world’s most valuable cryptocurrency fell 10% on Monday after falling again over the weekend. Bitcoin prices
Now it has fallen by almost 20% in the last week. At less than $ 31,000, Bitcoin is more than 50% higher than its record high of $ 69,000 since late last year and is at its lowest point since July 2021.
Other cryptocurrencies, sometimes referred to altcoins
, Has also been severely attacked. Ethereum, binance, solana and cardano have all fallen 15% in the past week. Elon Musk’s favorite Doug Coyne
Has fallen by 10%.
Cryptocurrencies are also proving to be dangerous Shares
And the same worries of pulling down are easily affected Dove
, S&P 500
“Unstable trading in digital assets has not been unusual in previous years,” said Michael Cameron, CEO of Skilling, a trading platform. “Cryptocurrencies are increasingly moving in tandem with technology stocks, with investors viewing them as risky assets and retreating to safer corners of the market during market fluctuations.”
Gamerman said he has been positive on bitcoin for a long time. More and more hedge funds and other large companies have begun to invest in crypto, and some global central banks have begun to embrace it.
But “Bitcoin has not escaped the risk of global inflation spreading to other asset classes. So we can expect the downward trend to continue.”
Suffered from the same problems that dragged down Bitcoin stocks
Fears and worries about inflation Large interest rate hike
From the Federal Reserve and the tremor a Potential economic recession
To Noise on Wall Street
And the bonds sent will skyrocket.
10 year treasury Bond yield
It is now over 3.1%, more than double this year. Long-term bond yields are now at their highest level since November 2018.
Yield increase also helped to raise value Dollar
, Which will rise along with interest rates. The US dollar index is now trading near the highest level in twenty years. This is bad news for Bitcoin as well, as many crypto supporters point to the dollar’s weakness as a good sign for digital currencies.
As rates (and the dollar) continue to rise, some crypto skeptics think Bitcoin has started selling. The Federal Reserve is starting to withdraw monthly bond purchases and other stimulus, which could be bad news for all types of speculative assets.
“The Fed’s dramatic reversal of cash flow … will fix the epidemic time bubble in cryptocurrencies, money-losing technology companies and meme stocks,” said Jay Hotfield, chief investment officer and manager at Infrastructure Capital Management. InfraCap Equity Earnings ETF.
Hotfield said it expects Bitcoin to depreciate to $ 20,000 by the end of this year.
The decline of crypto affects many stocks with the emergence of the industry. Broker Coinbase
It fell 17% on Monday and is down more than 65% this year. Robin Hood
It allows people to buy and sell certain cryptocurrencies, which has dropped by more than 45% in 2022.
The shares of many cryptocurrency miners, who run servers that solve complex mathematical puzzles needed to create new bitcoin and other cryptocurrencies, have plummeted. Hive blockchain (HVBTF)
, Marathon Digital Holdings (Mara)
And Riot blockchain (Rebellion)
All have dropped by 50% to 60% this year.
The major setback in these and other motivational technology stocks is another sign of a rapid change in the mood of the market this year. The CNN Business Fear and Greed Code
It measures seven indicators of market sentiment, which is in the area of extreme fear.
Investors can continue to avoid volatile cryptocurrencies in favor of safer havens such as blue chip stocks that pay dividends.
Traders are “very reluctant to accept the extra risk associated with the crypto sphere,” DailyFX analyst Tommy da Costa said in a statement.
He added that “the future of personal currencies or tokens is in doubt” and that “interest rate hikes on bitcoin, ethereum and other established cryptocurrencies could affect the short-term potential for profit.”
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