Bitcoin falls 14% in $500 billion cryptocurrency sell-off
Top line
Bitcoin’s decline extended on Monday, as the world’s largest cryptocurrency retreated from an all-time high last week, though it remains a banner year for Bitcoin investors.
Bitcoin has faced difficulties since the Federal Reserve indicated that interest rates are likely to remain high for longer.
Basic facts
Bitcoin fell 2% to just under $93,000 by 9pm GMT, or 4pm EST (price movements for continuously traded cryptocurrency tokens are indicated in GMT).
The digital asset is on track to achieve its lowest end-of-day price since November 27.
Bitcoin is down 14% from last Tuesday’s record high of over $108,000, pushing it into correction territory for the first time in four months.
Shares of publicly traded cryptocurrency companies also suffered on Monday, with the Bitcoin whale Accurate strategy Shares of cryptocurrency exchange Coinbase fell 9%, and shares of the most valuable bitcoin mining company, Marathon Digital, fell 4%.
All three of these stocks are down at least 20% from their peaks earlier this month.
Big number
500 billion dollars. That’s roughly how much the total market capitalization of all cryptocurrencies has fallen from last Monday’s record high of $3.9 trillion. According to To Quinn Gekko. Bitcoin represents about 56% of the total cryptocurrency market with a market cap of $1.9 trillion.
Why did Bitcoin fall?
The recent sell-off coincides with losses in risky futures financial assets, including stocks, with the S&P 500 falling 2% over the past week. What drove the declines was the Federal Reserve on Wednesday interviewas the US central bank indicated growing concerns about persistent inflation and expected smaller interest rate cuts for 2025 than previously expected. This is bad news for riskier assets, such as cryptocurrencies, as investors tend to keep their money in high-yielding, low-risk government bonds when interest rates are higher. “Monetary easing has always favored the price of Bitcoin, and the opposite has a negative impact on the price,” Yuya Hasegawa, a cryptocurrency market analyst at Japan Crypto Exchange Bank, wrote in email comments on Monday.
Contra
Interesting corrections are also very common for Bitcoin, which experienced a sell-off of more than 20% this summer and more than 70% from 2021 to 2022 before its all-time high this month. Bitcoin remains significantly higher in 2024, up 120% year to date, up 36% since the election, which is back fresh. Crypto bull Donald Trump to Washington. Other assets that rose similarly took a breather, including Tesla stock, which is down 12% from its record high last week but is trading more than 70% higher than it was before the election.
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2024-12-23 20:18:00
