Bitcoin hit its lowest level since July 2021, as falling global markets weighed on cryptocurrencies, which are now trading in line with so-called riskier assets like tech stocks.
Bitcoin Drops Extremely Low
Bitcoin fell to $32,763.16 soon before 1100 GMT, marking the seventh straight session of losses. The cryptocurrency has lost more than half its value since hitting an all-time high of $69,000 in November last year, having plummeted 13% in May.
COO of Singapore-based crypto platform Stack Funds, Matt Dibb said: “I think everything within crypto is still classed as a risk asset, and similar to what we’ve seen with the Nasdaq, most cryptocurrencies are getting pummeled.”
Last week, the Nasdaq (.IXIC) plummeted 1.5 percent, bringing its year-to-date loss to 22 percent, as persistent inflation forces the US Federal Reserve to raise rates despite slowing GDP. On Monday, Nasdaq futures fell another 2.3 percent.
Other Factors Behind the Decline
Other factors in bitcoin’s weekend slide, according to Dibb, were the crypto market’s notoriously low liquidity on weekends, 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 that are linked to traditional assets, most commonly the US dollar. The crypto world is keeping an eye on UST because of its unique approach to maintaining a 1:1 dollar peg, as well as its founders’ aspirations to construct a $10 billion bitcoin reserve to back the stablecoin.
According to this, UST market volatility might potentially flow over into bitcoin markets. On Monday, Ether, the world’s second largest cryptocurrency and the backbone of the Ethereum network, plummeted below $2,360, its lowest level since late February.