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By Yashasvini Razdan, 12:42 PM ET
Bitcoin ’s price dropped as much as 10%, below $30,000, for the first time since January, as China intensified its crackdown on cryptocurrency. This fall has quashed the leading cryptocurrency’s gains over the entire year till now.
The leading cryptocurrency started trading at around $29,000 in 2021 after increasing its value by four in 2020. From its mid-April high of $65,000, bitcoin lost more than 50% of its value. In comparison to that, S&P 500 gained 12% since December 2020.
Concerns surrounding the negative impact of cryptocurrency mining on the environment, the renewed regulatory crackdown in China, and the Fed’s announcement of the first interest rate hike’s timing to 2023 — all combined to add bearish pressures on the cryptocurrency.
Other cryptocurrencies such as Dash, which fell 22%, and XRP that dropped 21%, saw major losses. Even Litecoin tumbled down 18%. Other major coins such as Cardano and Ether are suffering 10%-20% losses. The joke cryptocurrency, Dogecoin, is trading 25% lower. Prude fell 68% and Manyswap dropped 60%, among more volatile DeFi tokens, reported Bloomberg.
This is not the first time bitcoin has seen such a huge fall. In late 2017, bitcoin fell by 80% leading to a significant pullback in the cryptocurrency market. Despite its volatility, Bitcoin and other cryptocurrencies have seen increased participation of hedge fund managers ad banks in the past two years.
Between mid-September of 2020 and April 2021, the original cryptocurrency’s value rose nearly 500%, and even with the current fall, its value is still up about 150% over the past 12 months.
Picture Credits: Reuters