(LONDON) Bitcoin fell sharply on Friday to return to levels not seen since August, hit by a lack of risk appetite from investors disappointed by tech giants’ results and chilled by a tougher Fed.
Posted at 11:33 a.m.
The cryptocurrency was down 6% at $38,860 around 11:05 a.m., after hitting $37,723, a low in more than five months. Since the start of the year, the first cryptocurrency has fallen by 16% (-44% since its all-time high reached in November, at $68,992).
Bitcoin’s decline began when the platform streaming Netflix has announced that it expects a sharp slowdown in the growth of its number of subscribers, causing its stock price to fall and dragging other American technology stocks in its wake.
“Bitcoin plummets with the technology sector, such a correlation with the stock markets raises the question of its usefulness as an asset class”, asks Neil Wilson, analyst at Markets.com.
And the entire cryptocurrency market was suffering: according to the Coingecko site, which lists more than 12,000, the market size is now 1926 billion dollars, which means that its value has theoretically decreased by more than 1000 billion dollars. dollars in less than three months.
“The sector is taking a big hit today, and the majority of the 100 biggest cryptocurrencies are down around 10%, but it is important to note that all risky assets are in trouble”, underlines Walid Koudmani, analyst at XTB.
After a year 2020 where cryptocurrency broke all its records and interested more and more big names in finance, some of its followers defended the idea that bitcoin was an anti-inflation value, a form of digital gold.
But as prices soar across the globe, the prospect of a US Federal Reserve (Fed) rate hike is pushing investors away from riskier assets.
In addition, regulators are increasingly concerned about the place that cryptocurrencies take in the economy. In Russia, the Russian Central Bank on Thursday proposed a ban on investments and payments in cryptocurrencies.
“This announcement had little effect on prices, as the cryptocurrency industry has shown that it is adapting quickly to similar bans”, especially in China in 2021, said Craig Erlam, analyst at Oanda.
More moderate, the Spanish market regulator has strongly regulated advertising for trading platforms, and similar measures are being studied elsewhere in Europe, particularly in the United Kingdom and Italy.