NEW YORK ( Associated Press) – Bitcoin fell below the psychologically important threshold of $ 20,000 on Saturday for the first time since late 2020, in a new sign that sales in cryptocurrencies are deepening.
The price of the most popular cryptocurrency fell by as much as 12% to less than $ 18,100 on the East Coast in the late afternoon, according to the cryptocurrency news website CoinDesk.
The last time bitcoin was at that level was in November 2020, when it was heading for an everyday high of nearly $ 69,000, according to CoinDesk. Many in the industry believed 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 tumble on Saturday.
The cryptocurrency industry has experienced turmoil amid growing turmoil in financial markets. Investors are selling riskier assets as central banks raise interest rates to curb accelerated inflation.
The overall market value of cryptocurrency assets has fallen from $ 3 trillion to below $ 1 trillion, according to coinmarketcap.com, which tracks cryptocurrency prices. On Saturday, the company’s data showed that crypto’s global market value stands at about $ 834 billion.
A spate of cryptocurrencies has given rise to urgent calls to regulate the freewheel industry, and last week two-party legislation was introduced in the US Senate to regulate digital assets. The industry has also stepped up its support efforts – flooding $ 20 million in congressional racing for the first time this year, according to records and interviews.
Cesare Fracassi, a professor of finance 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 major problem. Instead, he said the focus should be on recent news from lending platforms.
One of them, Celsius Network, said this month that it was interrupting all withdrawals and transfers, with no sign of when it would give its 1.7 million customers access to their funds. Another platform, Babel Finance, said in a notice posted online on Friday that it would suspend redemptions and withdrawals on products due to “unusual liquidity pressures.”
“There’s a lot of turmoil in the market,” Fracassi said. “And the reason prices are falling is because there is a lot of concern that the sector is being transferred.”
Cryptocurrency exchange platform Coinbase announced on Tuesday that it had laid off about 18% of its workforce, with CEO and co-founder Brian Armstrong placing part of the debt on an upcoming “crypto-winter”.
Stablecoin Terra exploded last month, losing $ 10 billion in value in a matter of hours.
Crypto has permeated much of popular culture ahead of its recent tumble, with Super Bowl ads promoting digital assets and celebrities and YouTube personalities regularly promoting it on social media.
David Gerard, a crypto-critic and author of “Attack of the 50 Foot Blockchain,” said the recent crashes show a failure by regulators, who he believes should have done more research into the industry years ago. Many emerging investors – especially young people – have invested on the basis of a false hope sold to them, he said.
“There are real human victims here who are ordinary people.”
Chan reported from London.
