The cryptocurrency extended its slide on Wednesday, with bitcoin on the verge of falling below $20,000 for the first time since December 2020.
The price of Bitcoin dipped to as low as $20,111 early in the US trading session before rebounding slightly to trade recently at $21,271. That mark a drop of 3.3% from the ET price at 5 p.m. ET on Tuesday and is down 69% from the high of $68,990.90 reached in November 2021, according to CoinDesk.
The move in cryptocurrency wiped out bitcoin’s roughly a year and a half gain, which began to soar in late 2020 as speculative fervor swept through financial markets.
Since the end of last year, the air was leaked out cryptocurrencies, with investors retreating from riskier assets in anticipation of easy money market conditions ending.
Two well-known incidents in recent weeks have accelerated the cryptocurrency’s decline. In the May, collapse of stablecoin TerraUSD and its sister token Luna led to a sell-off across cryptocurrencies. Then on Sunday, Celsius Network, one of the largest crypto lenders, said it had suspend all withdrawals, swaps and transferscausing further panic.
The pain in the cryptocurrency market has become extensive. The price of ether, the internal currency of the Ethereum network, fell to $1,054.27 on Wednesday, down 11% from the ET level at 5 p.m. ET on Tuesday. Cardano’s ada . token and even crypto jokes dogecoin to slide.
The latest sign of stress and confusion comes from a vague tweet from the co-founder of Three Arrows Capital, a hedge fund that has invested heavily in cryptocurrencies. “We are in the process of communicating with the parties involved and are fully committed to resolving this issue.” tweets speak. No further details are provided. Three Arrows did not immediately respond to a request for comment.
The sell-off continued to beat the major US stock indexes, with the S&P 500 index entering bear market territory for the first time on Friday in more than two years. WSJ’s Caitlin McCabe looks at some of the key drivers behind market volatility. Photo: John Minchillo / Associated Press
The Fall of Cryptocurrencies Coincided with sell-off on the stock market. Earlier this week, S&P 500 Enters Bear Market, defined as a drop of 20% or more from a recent high. Losses have accelerated in recent days after higher-than-expected inflation data for May raised concerns that the Federal Reserve may need to raise interest rates more aggressively. US central bank rate decision due on wednesday.
Write letter for Caitlin McCabe at [email protected]
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