(London) Bitcoin sank on Monday, with the risk asset weighed down by investor risk aversion falling below $50,000 for the first time since February.
By 9:30 a.m. ET (3:30 p.m. CET), bitcoin was down 13.49% at $51,161.50, shortly after plunging more than 16% to $49,212.74, a nearly six-month low.
“At the peak of the day, $300 billion was wiped off the cryptocurrency market cap,” says Simon Peters, an analyst at eToro.
“While bitcoin often follows its own path, the current scenario aligns it more closely with traditional market dynamics,” Stephen Innes, an analyst at SPI AM, told AFP.
Bitcoin, an asset considered speculative, is in fact suffering first and foremost from risk aversion on the markets, like stocks on Monday.
“A weaker US jobs report and a higher unemployment rate on Friday” combined with “a rise in the Japanese yen following the Bank of Japan’s recent interest rate hike, have caused investors to flee risk assets,” Simon Peters said.
In this tumultuous market environment, “new bitcoin investors may feel nervous,” Innes continues, “while long-term investors may dump bitcoin to cover losses in other parts of their portfolios.”
Because the day was marked by a free fall of the Asian stock markets on Monday, with Tokyo suffering the biggest drop in points in its history.
European stock markets are also trading in the red as Wall Street opened sharply lower on Monday for the second session in a row.
Stephen Innes also attributes the sharp decline in bitcoin to “the broader sell-off in US technology stocks.”
Finally, analysts point to bankrupt cryptocurrency exchange Mt. Gox and lingering fears about repaying its creditors.