London — Bitcoin’s price fell below $20,000 for the first time since late 2020 on Saturday†
Bitcoin, the most popular cryptocurrency, fell below the psychologically important threshold, dropping as much as 9% to below $19,000 and hovering around that figure, according to cryptocurrency news site CoinDesk.
The last time bitcoin was at that level was in November 2020, when it headed to its all-time high of nearly $69,000, according to CoinDesk. Many in the industry thought it wouldn’t go below $20,000.
Bitcoin has now lost more than 70% of its value since reaching that peak.
Ethereum, another widely followed cryptocurrency that has been shifting in recent weeks, made a similar fall on Saturday.
It is the latest sign of turmoil in the cryptocurrency industry amid broader financial market turbulence. Investors are selling riskier assets as central banks raise interest rates to combat rising inflation.
The total market value of cryptocurrency assets has fallen from $3 trillion to less than $1 trillion, according to coinmarketcap.com, a crypto price tracking company.
A spate of crypto meltdowns has wiped out tens of billions of dollars worth of value from the currencies, sparking urgent calls to regulate the freewheeling industry. Last week, the US Senate introduced a bipartisan bill to regulate digital assets. The crypto industry has also stepped up its lobbying efforts – pouring $20 million into congressional races for the first time this year, according to data and interviews.
Cesare Fracassi, a finance professor at the University of Texas at Austin who leads the school’s Blockchain initiative, believes Bitcoin’s fall below the psychological threshold is not an issue. Instead, he said the focus should be on recent news from lending platforms.
Cryptocurrency lending platform Celsius Network said this month it was pausing 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 industry is over-leveraged.”
Cryptocurrency exchange platform Coinbase announced Tuesday that it has laid off about 18% of its workforce, with company CEO and co-founder Brian Armstrong putting some of the blame on a coming “crypto winter”.
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 many Super Bowl ads touting the digital assets and celebrities and YouTube personalities routinely promoting it on social media.