Bitcoin hit its lowest level since July 2021 as falling global markets weighed on cryptocurrencies, which now trade online with so-called riskier assets like tech stocks.
Bitcoin falls extremely low
Bitcoin fell to $32,763.16 shortly before 11:00 GMT, marking the seventh straight session of losses. The cryptocurrency has lost more than half of its value since hitting an all-time high of $69,000 in November last year, after falling 13% in May.
Matt Dibb, COO of Singapore-based crypto platform Stack Funds, said: “I think anything in crypto is still classified as a risk asset, and as we have seen with the Nasdaq, most cryptocurrencies are trampled.”
The Nasdaq (.IXIC) fell 1.5% last week, taking its year-to-date loss to 22%, as lingering inflation forces the US Federal Reserve to raise rates despite the slowdown of GDP. On Monday, Nasdaq futures fell another 2.3%.
Other factors behind the decline
Other factors in bitcoin’s weekend decline, according to Dibb, were notoriously low liquidity in the crypto market over the weekend, as well as short-lived fears that an algorithmic stablecoin dubbed Terra USD (UST) could lose its peg to the dollar.
Stablecoins are digital tokens tied to traditional assets, most commonly the US dollar. The crypto world is keeping tabs on the UST due to its unique approach to maintaining a 1:1 dollar peg, as well as its founders’ aspirations to build a $10 billion bitcoin reserve to back the stablecoin. .
According to this, volatility in the UST market could potentially spill over into bitcoin markets. On Monday, Ether, the world’s second-largest cryptocurrency and the backbone of the Ethereum network, fell below $2,360, its lowest level since late February.
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