Bitcoin crashes with stocks and is now down 50% from its all-time high

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Bitcoin prices fell further on Saturday to levels not seen since last August, as a sell-off in riskier assets like stocks spread to cryptocurrencies. Bitcoin is now down over 50% from its November high.

Bitcoin BTCUSD, +0.71% fell to $34,042.78 on Saturday, a 7.2% decline, before paring losses. Other digital assets also slipped, with Ethereum ETHUSD +2.26% down 12%. Solana and Cardano each fell by at least 17%, according to Coinbase.

Bitcoin price had already taken a major hit from Thursday night to Friday, when it fell from around $43,000 to around $38,500. But that plunge continued even deeper on Saturday, taking it to a low of around $34,000.

The leading crypto coin has now fallen 16.8% over the past week. Other coins have seen even more dramatic losses: Ethereum is now down 25%.

Anyone who bought bitcoin at the start of the year saw it lose more than 23% of its value, in just three weeks.

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The crypto price drop followed a volatile session on Wall Street on Friday that saw stocks swing from early gains to a selloff, as investors repeated this week’s selling pattern, pushing the Nasdaq Composite deeper. in the correction territory.

“Pessimism continues to grow among investors and traders regarding riskier assets and this primarily influences the price of stocks and bitcoin,” Naeem Aslam, chief market analyst at AvaTrade, said in a note to the media. clients.

“The problem with bitcoin is that when it starts falling, the price action drops like there’s no tomorrow,” said Aslam, who added that January also tends to fall. to be a volatile month for the cryptocurrency on a historical basis.

Aslam also cited a Russian central bank proposal on Thursday to ban the use and mining of cryptocurrencies. Russia is one of the world’s top bitcoin mining locations and joins China, which imposed its own ban on activity last year.

Proponents had hoped in recent days that the $40,000 level would be a significant psychological barrier and that the price might stabilize above this level. Instead, it fell well below that and continued to fall.

“Many altcoins are supported at their summer 2021 lows, making it critical that bitcoin maintains support as it sets the tone for the cryptocurrency space,” wrote Katie Stockton, Managing Director. CEO of Fairlead Strategies, a technical research firm, in a Friday briefing.

The recent decline also means that the price is likely to decline over the course of the year. This time in 2021, bitcoin was trading around $33,000, although just a few days after that, it would see a price rally that would take it above $50,000 and see it perform well for most of the summer.

Bitcoin’s decline since its peak has wiped out over $600 billion in market value, and over $1 trillion has been lost in the overall crypto market.

Crypto-centric stocks also fell on Friday, with Coinbase Global Inc. COIN -13.38% at one point losing nearly 16% and falling to its lowest level since its public debut in spring 2021.

Meanwhile, the Biden administration is preparing to release an initial government-wide strategy for digital assets as early as next month, according to Bloomberg News, and is tasking federal agencies to assess the risks and opportunities they present, people say. close to the file. .

The argument that Bitcoin is a form of “digital gold” also falls apart.

As the world’s largest cryptocurrency slips to $34,000, the lowest price since August, its decline in tandem with risky assets such as tech stocks casts a shadow over a long-vaunted similarity to gold .

Cryptocurrencies plunged alongside equities in a turbulent start to the year amid tighter-than-expected monetary policy, while gold, often touted as a store of value and inflation hedge, s is steadily trading higher this month.

Earlier this month, analysts at Goldman Sachs argued that Bitcoin could reach a price of $100,000, if it could gain more from the gold “store of value” market. Instead, the characteristic volatility of the digital asset has become evident.

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