April 24, 2024

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Bitcoin has lost 50% of its value since its November high

 The value of bitcoin fell below $34,000 (£27,630) during the weekend, according to the Coinbase cryptocurrency exchange.

The world’s largest cryptocurrency by market value has declined by half since its high in November last year.

The drop in the value of digital assets has coincided with a recent drop in stock markets around the world.

On Monday, the Asian markets sank again, with Japan’s benchmark Nikkei index plunging roughly 2%.

Bitcoin accounts for over a third of the cryptocurrency sector, with a market valuation of $650 billion.

Ethereum, the world’s second-largest cryptocurrency, has also lost value in the last week, shedding more than 10%.

Although the cryptocurrency market remained relatively quiet for the majority of 2022, volatile digital asset trading was not unheard of in previous years.

Individual individuals dominated trade for years, but hedge funds and money managers have recently entered the market.

As more traditional investors trade digital assets, cryptocurrency prices are rapidly mirroring those of global stock markets.

Many institutional investors buy cryptocurrencies as risk assets, similar to stocks in the technology sector.

During instances of market volatility, traditional investors often sell riskier assets and move their money into safer investments.

Last week, central banks around the world, including the United States, the United Kingdom, and Australia, raised interest rates in an effort to battle increasing prices.

The US Federal Reserve raised its key lending rate by half a percentage point, the greatest increase in almost two decades.

This has heightened market concerns that rising borrowing costs and inflation will have a severe impact on global economic growth.

Investors are also concerned about the war in Ukraine’s worldwide economic ramifications. Meanwhile, El Salvador and the Central African Republic have recently made Bitcoin legal tender.

El Salvador has been urged by the International Monetary Fund to reconsider its decision to enable consumers to use bitcoin alongside the US dollar in all transactions.