fell below $22,000 on Friday, after global shares fell amid uncertainty about how aggressive the Federal Reserve would be in its bid to cool inflation with rate hikes.
Bitcoin, the world’s largest cryptocurrency, has fallen 8.4% to $21,498 in the past 24 hours, according to CoinDesk. The selloff came after Bitcoin briefly crossed $25,000 over the weekend for the first time since mid-June. The crypto had received a boost from a decline in US inflation. Traders felt that took some pressure off the Federal Reserve, which has raised interest rates to tame rising prices.
U.S. stocks fell on Friday and stocks in Asia and Europe fell as Federal Reserve officials gave slightly divergent views on the pace of future rate hikes. St. Louis Fed President James Bullard said Thursday he favored a three-quarter hike at the Fed’s next meeting in September. However, Kansas City Fed President Esther George said “the case for continuing to raise interest rates remains strong,” but added that there was debate about “how quickly it needs to happen.”
Bitcoin and its ilk should in theory trade independently of mainstream finance, but they have proven to be highly correlated with other risk-sensitive assets such as stocks.
Craig Erlam, senior market analyst at Oanda, said that while the trigger for the Bitcoin selloff was not clear, “the fact that it has barely recovered any of those losses suggests that there is substance to the move.”
Erlam added that the break below $22,500 “could be significant if it holds, with the next key test remaining at $20,000.” He added: “Crypto winter may not be over yet.”
the second largest token, has fallen 8.7% in the last 24 hours to $1,697. Smaller tokens such as
also fell sharply.
Crypto-related shares such as
(RIOT) fell 8%, 11.4% and 8.5% respectively.
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