Bitcoin fell to its lowest level since July 2021 on Monday as a collapse in equity markets continued to hurt cryptocurrencies, which are currently trading in line with so-called riskier assets such as tech stocks.
Shortly before lunch time in Europe, bitcoin fell to $32,763.16, marking its fifth consecutive session of decline.
The cryptocurrency has lost 13 pc so far in May and has lost more than half its value since reaching an all-time high of $69,000 in November last year.
Matt Dibb, COO of Singapore-based crypto platform Stack Funds, said, “I think everything within crypto is still classified as a risk asset, and most crypto as we have seen with the Nasdaq. Currencies are deteriorating.”
Tech heavy Nasdaq fell 1.5 pc last week, and has lost 22 pc years so far, hurt by the prospect of persistent inflation forcing the US Federal Reserve to hike rates despite slowing growth. Nasdaq futures were down 2.3% on Monday.
Dibb said other factors driving the decline over the weekend – bitcoin closed at around $36,000 on Friday – were the crypto market’s notoriously low liquidity over the weekend, and also short-term fears that an algorithmic stablecoin called Tera USD (UST) could trade against the dollar. You can lose your peg. ,
Stablecoins are digital tokens that are pegged to other traditional assets, often the US dollar.
UST is closely watched by the crypto community, both because it maintains its 1:1 peg, and because its founders planned to build $10bn worth of bitcoin reserves to support the stablecoin. , which means volatility in the UST could potentially spread to the bitcoin markets. read more
Ether, the world’s second-largest cryptocurrency that underlies the Ethereum network, fell to $2,360 on Monday, its lowest since late February.