The price of bitcoin fell below $20,000 on Saturday for the first time since the end of 2020, another sign that the selloff in cryptocurrencies is getting worse.
Bitcoin, the most popular cryptocurrency, fell below the psychologically important threshold, dropping 9% to below $19,000 and hovering around that mark, according to cryptocurrency news site CoinDesk.
The last time bitcoin was at this level was in November 2020, when it was on its way to its all-time high near $69,000, according to CoinDesk. Many in the industry had believed it would not fall below $20,000.
Bitcoin has now lost over 70% of its value since reaching that peak.
Ethereum, another widely followed cryptocurrency that has slid in recent weeks, saw a similar drop on Saturday.
This is the latest sign of turmoil in the cryptocurrency industry amid broader turmoil in financial markets. Investors are selling riskier assets because central banks are raising interest rates to fight rising inflation.
A series of crypto meltdowns have wiped tens of billions of dollars worth of currencies and sparked urgent calls to regulate the freewheeling industry. Last week, a bipartisan bill was introduced in the US Senate to regulate digital assets. The crypto industry has also stepped up its lobbying efforts — flooding $20 million in congressional races this year for the first time, records and interviews show.
Cesare Fracassi, a finance professor at the University of Texas at Austin who leads the school’s Blockchain Initiative, believes Bitcoin’s drop below the psychological threshold isn’t a big deal. Instead, he said the focus should be on recent news from lending platforms.
Cryptocurrency lending platform Celsius Network said this month it was suspending all withdrawals and transfers, with no sign of when it would 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 because there’s a lot of concern that the sector is overleveraged. »
Cryptocurrency exchange Coinbase announced on Tuesday that it had laid off around 18% of its workforce, with the company’s CEO and co-founder Brian Armstrong blaming some of the blame on a ‘crypto winter’ coming.
Stablecoin Terra imploded last month, losing tens of billions of dollars in value within hours.
Crypto had permeated much of popular culture before its recent fall, with numerous Super Bowl ads touting digital assets and YouTube celebrities and personalities regularly promoting it on social media.