In November of last year, the price of Bitcoin peaked at $69,000. Since then, the world’s most important and largest cryptocurrency has been in a free fall. On Friday, the slowdown intensified further with a decline of more than ten percent.
On Saturday morning, bitcoin was costing just over $35,000. Thus, the decline in value since November is more than 40 percent.
The second largest cryptocurrency, Ethereum, is down 15 percent in the past 24 hours. In the past week, the currency has fallen by 25 percent. Ethereum has also fallen more than 40 percent since its peak last fall.
Follow Wall Street down
The cryptocurrency crash was followed by a downturn on Wall Street. The Nasdaq Composite Index lost 7.6 percent this week, and the Standard & Poor’s fell 5.7 percent and saw its third consecutive weekly decline. Rising prices have prompted investors to roll out deals in riskier properties, CNBC writes.
The 10-year yield on US government bonds, often referred to as US 10-year bonds, is also at a two-year high.
The interest rate rose to more than 1.9 percent this week. The US Federal Reserve also indicated that it plans to raise interest rates more than expected and reduce support purchases.
Bitcoin should act as a hedge against rising inflation, when it comes as a result of government stimulus, but analysts say the risk is that a more hawkish Federal Reserve could take the wind off bitcoin’s sails, according to CNBC.
It was a bit disappointing not to see Bitcoin react more favorably to the government interest rate reversal, chief market analyst Edward Moya at cryptocurrency exchange Oanda tells CNBC.
Cryptocurrency under pressure
According to CNBC, many experts warn that increased regulatory scrutiny in many countries and extreme price fluctuations are weakening the outlook for cryptocurrency.
China bans all activities related to cryptocurrency. US authorities are also cracking down on certain aspects of the market. This week, the Russian Central Bank proposed a ban on the use and mining of cryptocurrencies on Russian soil. The central bank believes that digital currency poses a threat to financial stability and monetary sovereignty.
Russia is among the three largest bitcoin miners after the United States and Kazakhstan.
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