Key Takeaways:
- The crypto market opened the weekend with another major selloff.
- Bitcoin hit $34,000 for the first time in six months.
- The current macro climate has had a major impact on crypto assets over the last few weeks.
Bitcoin, the world’s largest cryptocurrency by market value, fell below $37,000 Friday to its lowest dollar value since August 2021, according to CoinDesk. The selloff continued into the weekend, falling to $35,822.41 on Saturday morning. Bitcoin is down 47% from its record in November 2021.
The drop came fast on the heels of a late-afternoon swoon in the stock market on Thursday.
Cryptocurrencies and stocks have fallen together since the start of the year, responding to investor worries about how a series of expected Federal Reserve interest-rate increases will ripple through markets.
Government sare cracking down as well. On Thursday, Reuters reported that Russia’s central bank has proposed a ban on crypto use and mining. Russia is one of the biggest crypto-mining nations in the world, but its central bank said that digital currencies can pose a threat to the country’s financial stability.
The Russian proposal comes just a few months after China launched a full-scale clampdown on cryptocurrency, banning both trading and mining.
Other countries are also flirting with a ban on crypto. In November, India said it was preparing to introduce a bill that would regulate digital currencies, although much is still unknown about that proposal. Earlier this week, India’s prime minister Narendra Modi said that global cooperation is needed to tackle problems posed by cryptocurrencies.
Social media was abuzz with memes as the cryptocurrency market recorded a dramatic fall on Friday.
Bitcoin, the largest cryptocurrency as per the market cap, fell over 15 percent to trade below $36,000, its lowest since July 2021. After almost touching the $52,000 mark on December 27, 2021, the crypto had been trading around the levels of $38,000-50,000. Bitcoin was last trading at the level around $35,350. Since touching its highest level of $70,000 in November 2021, Bitcoin has crashed nearly 50 percent.
Shares of cryptocurrency stocks, which tend to track performance of bitcoin, also fell on Friday. Cryptocurrency exchange Coinbase Global dropped 13%. MicroStrategy, which makes business software but has invested billions of dollars in bitcoin and whose chief executive, Michael Saylor, is a vocal advocate of the cryptocurrency, shed 18%.
However, not everyone is pessimistic. Goldman Sachs said that the price of bitcoin could reach more than $100,000 within the next five years. In a report published earlier this month, the bank’s analysts said they saw strong gains ahead because bitcoin would increasingly steal market share from gold.
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