Bitcoin has dropped to its lowest price since last month’s flash crash, as increasing financing rates impact on a portion of the top performing investment vehicles in recent years. In morning Asia trade Thursday, the numero uno crypto by market cap recorded a low of $42,466. This sent the price down to its lowest level since it hit $42,296 during a Sunday collapse at the beginning of last month.
Bitcoin has increased by almost 500% since the final leg of 2019 as a result of stimulus programs implemented during the Covid-19 epidemic. Other cryptos have also plummeted.
Ether, the second-most valuable cryptocurrency, recorded its steep decline to levels not witnessed since October 13, while Binance Coin also plunged to October levels. Tokens representing popular DeFi apps such as Uniswap and Aave fell in value.
“Judging by the present economic background, leverage within the Bitcoin market, and latest strength witnessed in the altcoin market, we believe it’s relevant to bet on Ethereum and rest of the smart contract networks” Fundstrat digital-asset analysts Sean Farrell and Will McEvoy opined Wednesday. We definitely wouldn’t bet any money on Bitcoin in the short term, but we believe there is a chance to go long to gain from volatility via derivatives methods.”
Cryptocurrency price fluctuations have occurred during a turbulent moment for financial markets. Inflationary pressures are pressuring central banks to tighten monetary policy, potentially reducing the liquidity tailwind that has supported a broad variety of financial products. US markets fell further as the Federal Reserve’s minutes indicated the possibility of sooner and quicker interest rate rises. The S&P 500 dropped 1.9%, driven by real estate companies, while the tech-heavy Nasdaq 100 lost 3.1%. On Thursday morning, stock declines stretched across Asia.
“The Fed is hawkish,” noted Stephane Ouellette, CEO and co-founder of FRNT Financial Inc., a cryptocurrency platform. “In cryptocurrency, knee-jerk responses tend to perceive them as only riskier assets, despite longer-term patterns concerning inflation, store of wealth, and so on.”
Several areas of the cryptocurrency industry are now under strain. Bitcoin mining stocks have taken a hit as experts revise their forecasts after a record-breaking 2021. Bitcoin reached a high of over $69,000 at the start of November after US authorities approved Bitcoin futures-based exchange-traded funds.
