BITCOIN fell below the psychologically important threshold of $20,000 on Saturday for the first time since late 2020, in a fresh sign that the selloff in cryptocurrencies is deepening.
The price of the most popular cryptocurrency had plunged as much as 9.7% to less than $18,600 by late afternoon on the East Coast, according to the cryptocurrency news site CoinDesk. At some points during the day, it was below $18,000.
The last time bitcoin was at that level was in November 2020, when it was on its way up to an all-time high of nearly $69,000, according to CoinDesk. Many in the industry had believed it would not fall under $20,000 again.
Bitcoin has now lost more than 70% of its value since reaching its peak.
Ethereum, another widely followed cryptocurrency that has been sliding in recent weeks, took a similar tumble Saturday.
The cryptocurrency industry has seen turmoil amid wider turbulence in financial markets — this past week was Wall Street’s worst since 2020, during the early days of the coronavirus pandemic.
Investors are selling off riskier assets because central banks are raising interest rates to combat quickening inflation. Higher rates can help bring down inflation, but they also heighten the chances of a recession by increasing borrowing costs for consumers and businesses and pushing down prices for stocks, and other investments like cryptocurrencies.
The overall market value of cryptocurrency assets has fallen from $3 trillion to less than $1 trillion, according to coinmarketcap.com, which tracks crypto prices. As of Saturday afternoon the company’s data showed crypto’s global market value stood at about $816 billion.
A spate of cryptocurrency meltdowns has sparked urgent calls to regulate the freewheeling industry, and last week bipartisan legislation was introduced in the U.S. Senate to regulate the digital assets. The industry has also upped its lobbying efforts, flooding $20 million into congressional races this year for the first time, according to records and interviews. (AP)