Bitcoin hits lowest since September in drop of 40% from record
BNN Bloomberg
Bitcoin extended a weeks-long drop on Friday, falling below US$42,000 to levels not seen since September.
Bitcoin extended a weeks-long drop on Friday, falling below US$42,000 to levels not seen since September.
The largest cryptocurrency declined as much as 4.9 per cent to US$41,008, marking a tumble of about 40 per cent from its record near US$69,000 reached Nov. 10. Ether, the second-largest, dropped as much as 9 per cent to its lowest level since Sept. 30. Both of those tokens, as well as others including Binance Coin, Solana, Cardano and XRP are down more than 10 per cent in the past seven days, according to CoinGecko.
The retreat comes after minutes from the Federal Reserve’s December meeting, published Wednesday, flagged the chance of earlier- and faster-than-expected rate hikes as well as potential balance-sheet rundown.
“The Fed’s intention to reduce the balance sheet in Q1 2022 is the primary cause of this sell-off,” Fundstrat strategists said in a note Thursday. “Unfortunately, no immediate support looks likely ahead of September 2021 lows at US$39,573, with breaks of that leading down to last summer’s May-July bottom.”
Bitcoin gained about 60 per cent last year, outperforming other asset classes amid a narrative that included institutional adoption, inflation protection and investment diversification. It’s struggled in recent weeks, though, amid a volatile period for financial markets. Spiking inflation is leading central banks to tighten monetary policy, threatening to reduce the liquidity tailwind that lifted a wide range of assets.
