LONDON – The price of bitcoin fell below $ 20,000 on Saturday for the first time since the end of 2020, as a new sign that the sale of cryptocurrencies is deepening.
Bitcoin, the most popular cryptocurrency, fell below the psychologically important threshold, falling as much as 9% to less than $ 19,000 and was moving around that mark, according to cryptocurrency news site CoinDesk.
The last time bitcoin was at that level was in November 2020, when it was on track to reach a record high of nearly $ 69,000, according to CoinDesk. Many in the industry believed it would not fall below $ 20,000.
Bitcoin has already lost more than 70% of its value after reaching this peak.
Ethereum, another widely used cryptocurrency that has been declining in recent weeks, saw a similar decline on Saturday.
This is the latest sign of turmoil in the cryptocurrency industry amid wider turbulence in financial markets. Investors are selling off riskier assets because central banks are raising interest rates to fight rising inflation.
The total market value of cryptocurrency assets has fallen from $ 3 trillion to below $ 1 trillion, according to coinmarketcap.com, a company that tracks cryptocurrency prices.
A series of crypto collapses has wiped out tens of billions of dollars worth of currencies and sparked urgent calls to regulate the free industry. Two-party legislation to regulate digital assets was introduced in the US Senate last week. The crypto industry has also stepped up its lobbying efforts – flooding $ 20 million in congressional races this year for the first time, according to records and interviews.
Cesare Fracassi, a professor of finance at the University of Texas at Austin who leads the school’s blockchain initiative, says falling bitcoin below the psychological threshold is not a big deal. Instead, he said the focus should be on the latest news from lending platforms.
The cryptocurrency lending platform Celsius Network said this month that it is pausing all withdrawals and transfers, with no indication of when it will give its 1.7 million customers access to their funds.
“There is a lot of turbulence in the market,” Fracassi said. “And the reason prices are falling is that there are many fears that the sector is over-leveraged.
The cryptocurrency exchange platform Coinbase said on Tuesday it had cut about 18 percent of its workforce, with CEO and co-founder Brian Armstrong blaming some of the crypto winter.
Stablecoin Terra collapsed last month, losing tens of billions of dollars in hours.
Crypto has infiltrated much of popular culture before its recent collapse, with many Super Bowl ads advertising digital assets and celebrities and YouTube personalities routinely promoting it on social media.
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