Bitcoin falls to its lowest level since January, paralleling falling financial markets.
HONG KONG- Bitcoin dropped to its lowest level since January on Monday as falling equity markets continued to weigh on cryptocurrencies, which are now trading in accordance with so-called riskier assets such as technology companies.
Bitcoin fell as low as $33,266 during morning trading, hitting the bottom of January at $32,951. A decline below that point would be the lowest level since July of last year.
The price then stabilised about $33,500, a decrease of 1.4%
“I believe anything inside crypto is still considered a risk asset, and similar to what we’ve seen with the Nasdaq, the majority of crypto currencies are being pummelling,” said Matt Dibb, COO of Singapore-based crypto platform Stack Funds.
The tech-heavy Nasdaq declined 1.5% last week and is down 22% year-to-date due to the possibility that persistent inflation may force the US Federal Reserve to raise interest rates despite slowing economic growth. In Asia trading on Monday morning, Nasdaq futures declined by an additional 0.8%. MKTS-GLOB
Bitcoin ended on Friday at $36,000. According to Dibb, additional causes in the decrease over the weekend were the crypto market’s usually low liquidity on weekends and short-lived worries that algorithmic stablecoin Terra USD (UST) may lose its dollar peg.
Stablecoins are digital currencies that are tied to other conventional assets, often the U.S. dollar.
UST is being monitored by the crypto world because to its unusual method of maintaining a 1:1 dollar peg, as well as its creators’ ambitions to construct a reserve of $10 billion worth of bitcoin to back the stablecoin, which means volatility in UST may possibly affect bitcoin markets.
Ether, the second-largest cryptocurrency in the world and the underlying asset of the ethereum network, reached a low of $2,421 on Monday, its lowest level since late February.
