NEW YORK (AP) – The price of bitcoin fell below USD20,000 on Saturday for the first time since late 2020, in a fresh sign that the sell-off in cryptocurrencies is deepening.
Bitcoin, the most popular cryptocurrency, fell below the psychologically important threshold, dropping by as much as nine per cent to less than USD19,000 and hovering around that mark, according to the cryptocurrency news site CoinDesk.
The last time bitcoin was at that level was in November 2020, when it was on its way up to its all-time high of nearly USD69,000, according to CoinDesk. Many in the industry had believed it would not fall under USD20,000.
Bitcoin has now lost more than 70 per cent of its value since reaching that peak.
Ethereum, another widely followed cryptocurrency that’s been sliding in recent weeks, took a similar tumble on Saturday.
It’s the latest sign of turmoil in the cryptocurrency industry amid wider turbulence in financial markets. Investors are selling off riskier assets because central banks are raising interest rates to combat quickening inflation.
The overall market value of cryptocurrency assets has fallen from USD3 trillion to below USD1 trillion, according to coinmarketcap.com, a company that tracks crypto prices. On Saturday, the company’s data showed crypto’s global market value stood at about USD834 billion.
A spate of crypto meltdowns has erased tens of billions of dollars of value from the currencies and sparked urgent calls to regulate the freewheeling industry. Last week, bipartisan legislation was introduced in the US Senate to regulate the digital assets.
The crypto industry has also upped its lobbying efforts – flooding USD20 million into congressional races this year for the first time, according to records and interviews.
Finance professor at the University of Texas at Austin Cesare Fracassi, who leads the school’s Blockchain Initiative, believes Bitcoin’s fall under the psychological threshold isn’t a big deal.
Instead, he said the focus should be on recent news from lending platforms.