Bitcoin hits lowest level in 18 months

Bitcoin has fallen below the carefully watched $US20,000 threshold, to its weakest level in 18 months, as the problems facing the cryptocurrency sector persist.

Bitcoin has dropped more than 13% at one point, dropping below the carefully watched $US20,000 threshold to its weakest level in 18 months. This decline was fueled by investor concerns over the industry’s escalating problems as well as the general reluctance to engage in riskier assets.

The bitcoin lending company Celsius frozen withdrawals and transfers between accounts this week, and cryptocurrency businesses started firing employees as a result.

Additionally, there were rumours that a bitcoin hedge fund had encountered difficulties.

The developments came at the same time that markets were falling, with U.S. stocks experiencing their worst weekly percentage decline in two years due to concerns about rising interest rates and the increasing risk of a recession.

The stock market crash and the heightened pace and depth of bitcoin losses could put the support of various investment groups for the cryptocurrency in jeopardy.

While some institutions bought bitcoin in the hopes that it would counteract falls in equities and bonds, Michael Purves, founder and CEO of Tallbacken Capital, claimed that the cryptocurrency hasn’t proven that it is an asset that is uncorrelated.

Given that the utility of bitcoin has not yet been established, the justification for institutions to purchase the drop is even more tenuous, he claimed.

I believe this will cost at least $15,000 USD, he stated. There is a lot of downward momentum.

The largest cryptocurrency, Bitcoin, fell by roughly 13.7% on Saturday afternoon, reaching a low of $US17,593 (its lowest level since December 2020), before rising to $US18,556 (still down 9.22%).

It has lost around 60% of its value so far this year, while ether, a competing cryptocurrency backed by Ethereum, has dropped 74%. Bitcoin reached a high of around $68,000 in 2021.

According to Edward Moya, senior market analyst at OANDA, “Breaking $US20,000 shows you that trust has fallen for the crypto business and that you’re seeing the latest pressures,” he said on Saturday.

As investors turn away from riskier assets, businesses like Coinbase Global Inc., Gemini, and BlockFi announced they will lay off thousands of staff. This sector has also incurred losses as a result.

The CEO of DoubleLine Capital, Jeffrey Gundlach, stated on Wednesday that he wouldn’t be shocked if bitcoin dropped to $US10,000.