NEW YORK (AP) – Bitcoin fell below the important psychological threshold of $20,000 on Saturday for the first time since late 2020, in a new sign of cryptocurrency selling. go deeper.
Most popular cryptocurrency price It fell as much as 12% to below $18,100 by late afternoon on the East Coast, according to crypto news site CoinDesk.
The last time Bitcoin was at that level was in November 2020, when it was on its way to an all-time high of around $69,000, according to CoinDesk. Many in the industry thought it would be no less than $20,000.
Bitcoin has now lost more than 70% of its value since its peak.
Ethereum, another widely followed cryptocurrency that has slipped in recent weeks, suffered a similar decline on Saturday.
The cryptocurrency industry has experienced turmoil amid broader turmoil in financial markets. Investors are selling riskier assets because central banks are raising interest rates to combat accelerating inflation.
The total market capitalization of crypto assets has fallen from $3 trillion to less than $1 trillion, according to coinmarketcap.com, which tracks cryptocurrency prices. On Saturday, the company’s data showed that the global cryptocurrency market capitalization reached about $834 billion.
A string of crashes in cryptocurrency has prompted urgent calls for regulation of the free industry, and last week bipartisan legislation In the US Senate to regulate digital assets. The industry has also ramped up its lobbying effort — pumping $20 million into congressional races this year for the first time, according to records and interviews.
Cesar Fracasi, a finance professor at the University of Texas at Austin who leads the school’s Blockchain initiative, believes that bitcoin falling below the psychological threshold is no big deal. Instead, he said, the focus should be on recent news from lending platforms.
One of them, Celsius Network, said this month that it was temporarily halting all withdrawals and transfers, with no indication of when it would give 1.7 million customers access to their funds. Another platform, Babel Finance, said in a notice posted online on Friday that it would suspend refunds and recalls on products due to “extraordinary liquidity pressures”.
“There is a lot of turmoil in the market,” Fracasi said. “The reason for the price drop is that there is a lot of concern that the sector is overburdened with debt.”
Crypto exchange Coinbase announced Tuesday that it has laid off about 18% of its workforce, with CEO and co-founder Brian Armstrong blaming some of the upcoming “crypto winter.”
Stablecoin Terra exploded last month, losing tens of billions of dollars in value within hours.
Crypto permeated a lot of popular culture before its recent stumble, with Super Bowl ads promoting digital assets and celebrities and YouTube personalities routinely promoting it on social media.
David Gerrard, crypto critic and author of “Attack of the 50 Foot Blockchain,” said the recent crashes show the failure of regulators, who he believes should have put more scrutiny on the industry years ago. He said that many budding investors – especially young people – invested based on false hope that had been sold to them.
“There are real human victims here who are ordinary people.”
___
Chan reported from London.
“Reader. Infuriatingly humble coffee enthusiast. Future teen idol. Tv nerd. Explorer. Organizer. Twitter aficionado. Evil music fanatic.”