Bitcoin drops below $30,000, lowest since July 2021
On Tuesday, bitcoin plummeted below $30,000 for the first time since July 2021 as cryptocurrencies followed the collapse of markets, with investors fearful of the aggressive monetary tightening of the United States and inflation.
The world’s biggest cryptocurrency by market value dropped as low as $29,764 in Tuesday’s trade before recovering over $30,000, prolonging a recent price crash as investors desert assets considered risky.
The value of Bitcoin has more than half since a November wave which saw the chip hit a record high of almost $69,000.
While crypto enthusiasts see Bitcoin as protection from inflation, an influx of more traditional investors tends to see it as a riskier asset.
They have been unloading bitcoin, other digital tokens, and other volatile assets such as tech stocks. The U.S. Federal Reserve takes steps to raise interest rates to meet decades of inflation.
“Bitcoin is shattering below some key technical levels as the endless selling on Wall Street continues,” said Edward Moya, Senior Market Analyst for the Americas in Oanda.
“The institutional investor pays special attention to Bitcoin like many of those who obtained it last year are now losing money on their investment,” he added.
While the “long-term fundamentals token has not changed in months”, concerns about growth and a possible recession create “a very challenging environment for cryptos”, Moya said.
“Nobody is looking to purchase the crypto dip just yet and that leaves bitcoin vulnerable here.”
The decline in cryptography comes after dives in U.S. equities and other markets; the tech-rich Nasdaq closed on Monday at 4.3%, the S&P 500 fell by 3.2%, and the Dow closed at 2%.