The cryptocurrency’s market tumble over the weekend echoed the broader stock market’s decline last week as investors moved away from riskier assets.
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The price of Bitcoin fell 5.3% to $33,879 on Sunday afternoon and is now about half its all-time high.
It wasn’t immediately clear what had triggered the decline, but the cryptocurrency’s market tumble over the weekend echoed the broader stock market’s decline last week as investors moved away from riskier assets.
Bitcoin, the largest cryptocurrency, hit a peak price of $67,802.30 in November 2021.
The Federal Reserve’s announcement Wednesday that it was raising interest rates by a half point, the largest hike since 2000 with additional increases expected this summer, sent the Dow Jones Industrial Average on Thursday down 1,063 points, or 3.1%. The S&P 500 dropped 3.6%, and the Nasdaq Composite fell 5%.
The tech-heavy Nasdaq Composite hit a 52-week low on Friday, plunging to 11,990.15. It is down 22.4% year-to-date.
As part of its efforts to fight high inflation, the Fed is also starting to wind down its $9 trillion asset portfolio but has ruled out raising interest rates by a more aggressive 0.75 percent.
At the same time, “risk assets” such as tech stocks and cryptos have been hurt because bond yields keep rising. The yield on the benchmark 10-year U.S. Treasury note touched 3.15% on Friday, near its highest level in four years. Higher Treasury yields reduce the extra return relative to bonds that traders expect from taking riskier bets.
The price of Ether, the second-largest digital asset, dropped 6.8% to $2,491 on Sunday. That is after Wednesday’s 6% gain to nearly $3,000, its best daily performance since February.
Write to Janet H. Cho at [email protected]
