LONDON (AP) – The price of bitcoin fell below $ 20,000 on Saturday for the first time since the end of 2020, in a new sign that sales in cryptocurrencies are deepening.
Bitcoin, the most popular cryptocurrency, fell below the psychologically important threshold, fell by as much as 9% to less than $ 19,000 and hovers around that mark, according to cryptocurrency news site CoinDesk.
The last time bitcoin was at that level was in November 2020, when it was on its way to its all-time high of almost $ 69,000, according to CoinDesk. Many in the industry had thought that it would not fall below $ 20,000.
Bitcoin has now lost more than 70% of its value since reaching its peak.
Ethereum, another widely followed cryptocurrency that has fallen in recent weeks, took a similar fall on Saturday.
It is the latest sign of unrest in the cryptocurrency industry in the midst of greater turbulence in the financial markets. Investors are selling more risky assets because central banks are raising interest rates to combat rising inflation.
The total market value of cryptocurrency assets has fallen from $ 3 trillion to below $ 1 trillion, according to coinmarketcap.com, a company that tracks cryptocurrency prices.
A wave of cryptocurrencies has wiped out tens of billions of dollars in value from the currencies and sparked urgent talks to regulate the freewheel industry. Last week, bipartisan legislation was introduced in the US Senate to regulate digital assets. The crypto industry has also increased its lobbying activities – flooding $ 20 million in congressional races this year for the first time, according to registrations and interviews.
Cesare Fracassi, a finance professor at the University of Texas at Austin who leads the school’s Blockchain Initiative, believes that Bitcoin’s fall below the psychological threshold is not a big deal. Instead, he said the focus should be on fresh news from lending platforms.
Cryptocurrency lending platform Celsius Network said this month that it will stop all withdrawals and transfers, with no sign of when it will give its 1.7 million customers access to their money.
“There’s a lot of turbulence in the market,” Fracassi said. “And the reason prices are going down is because there is a lot of concern that the sector is handed over.”
The cryptocurrency exchange platform Coinbase announced on Tuesday that it laid off around 18% of the workforce, with the company’s CEO and co-founder Brian Armstrong blaming some of the coming “crypto winter.”
Stablecoin Terra imploded last month, losing tens of billions of dollars in value in a matter of hours.
Crypto had permeated much of popular culture before its recent fall, with many Super Bowl ads claiming digital assets and celebrities and YouTube personalities routinely promoting it on social media.