Bitcoin on Monday, May 9 fell to its lowest level since January 2022, as falling equity markets weighed on cryptocurrencies, which are now trading in line with riskier assets like tech stocks.
In early trade, bitcoin fell as low as $33,266 to test the January low of $32,951. If it drops below that level, it will be at its lowest since July of 2021. The price then settled at roughly $33,500, down 1.4 per cent.
A Singapore-based crypto platform, Stack Funds said that everything in crypto is still classified as a risk asset, and most cryptocurrencies are pummelling in the same way that the Nasdaq has been.
The Nasdaq, which is heavily weighted in technology, plummeted 1.5 per cent last week and is down 22 per cent year to date, as persistent inflation forces the US Federal Reserve to raise rates despite slowing GDP.
On Monday morning Nasdaq futures were down another 0.8 per cent.
Other factors in bitcoin’s weekend slide were the crypto market’s notoriously low liquidity on weekends, as well as short-lived fears that an algorithmic stablecoin dubbed Terra (UST) could lose its stability against the US dollar.
Read more: Pakistan’s foreign currency reserves down by $328 million
The crypto world is keeping a close eye on UST because of its unique method of maintaining a 1:1 dollar peg, as well as its founders’ aspirations to construct a $10 billion bitcoin reserve to support the stablecoin, implying that UST volatility might potentially leak over into the bitcoin markets.
On Monday, Ethereum, the world’s second-largest cryptocurrency, plummeted to $2,421, its lowest level since late February.
