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On Monday, there was a significant sell-off in the stock markets, which affected not only traditional financial assets, but also the cryptocurrency market. Bitcoin, the best-known and most valuable cryptocurrency, has not escaped turbulence either.
The price of Bitcoin hit its lowest level since February on Monday. Back in March, bitcoin climbed to a record close to $74,000 (about 1.7 million crowns). Interest in newly approved bitcoin exchange-traded funds (ETFs) contributed to its growth at the beginning of the year.
After a sharp drop in price, bitcoin briefly fell below the $50,000 mark (roughly 1.1 million crowns) during Monday’s trading. Around 3 p.m., it weakened by 17 percent. The reasons for the drop are similar to those that affected the stock markets – the fear of recession, which is strongly prescribed in the mood of investors across the world.
Bitcoin, sometimes referred to as digital gold by parts of the market, has in the past shown the characteristics of an asset that could act as a safe haven during times of market volatility. However, in the current situation where investors are looking for real certainty, even cryptocurrencies are not spared from sell-offs.
“It’s a big reminder that bitcoin and cryptocurrencies in general are risky assets and are at the high end of the risk spectrum,” IG analyst Tony Sycamore said, according to Reuters.
Even the second largest cryptocurrency by market capitalization did not escape Monday’s washout. At one point, Ether was depreciating roughly 25 percent, falling below $2,200.
