Bitcoin fell to its lowest level since January today as falling stock markets continued to hurt cryptocurrencies, which currently trade in line with riskier assets such as tech stocks.
Bitcoin fell to $33,266 in morning trading, testing the January low of $32,951. A drop below that level would be the lowest since July of last year.
It then stabilized to trade around $33,500, down 1.4%.
“I think everything within crypto is still classified as a risky asset, and similar to what we’ve seen with the Nasdaq, most cryptocurrencies are getting hit,” said Matt Dibb, chief operating officer of the platform. of cryptocurrency Stack Funds, based in Singapore.
The tech-heavy Nasdaq fell 1.5% last week and is down 22% year-to-date, hurt by the prospect of persistent inflation forcing the US Federal Reserve to hike. rates despite slowing growth.
Dibb said that other factors in the decline over the weekend (Bitcoin closed around $36,000 on Friday) were the crypto market’s notoriously low liquidity over the weekends.
There were also short-lived fears that the algorithmic stablecoin called Terra USD could lose its peg to the dollar.
Stablecoins are digital tokens pegged to other traditional assets, often the US dollar.
USD is closely watched by the crypto community both for the novel way it maintains its 1:1 dollar peg and because its founders have laid out plans to build a $10 billion bitcoin reserve to back the stablecoin.
This means that the volatility in UST could potentially spill over into the bitcoin markets.
Ether, the world’s second largest cryptocurrency, which underpins the ethereum network, fell as low as $2,421 today, its lowest since late February.