Bitcoin, the cryptocurrency with the highest market value in the world, fell below $40,000 Friday to its lowest level since August 2021, according to CoinDesk.
The piece fell as much as 8.7% before regaining ground and negotiating $38,616.17, down 6.7% at the end of Thursday and more than 40% from its November 2021 high. The fall came after the stock market sold off which saw Wall Street stocks fall on Thursday.
It is now more common to see the value of the Bitcoin dollar fall when stocks fall, confirming investor concerns about how Federal Reserve interest rate increases will affect other markets. Clara Medal, research director at cryptocurrency market data provider Kaiko, explained that cryptocurrencies are no longer an isolated risk asset.
“Cryptocurrencies are is no longer an isolated risk asset and react to shifts in global policy,” Medalie said. “It’s no surprise that the two are starting to become more volatile as the liquidity taps close.”
Russia bans bitcoin
Bitcoin’s dollar value drop on Friday coincided with a 20% fall in by Netflix shares, deletion $40 billion market capitalization after the streaming giant announced that it plans to add significantly fewer subscribers this quarter than a year ago. However, the main reason for the decrease can perhaps be attributed to Russia’s plans to ban the mining of the coin, as explained Jason Dean, analyst at a digital asset research firm Quantum economy.
“Rumours of Russian mining bans, the effects of wind-down programs and ongoing regulatory concerns in some jurisdictions are currently taking more weight in trading and investment decisions than underlying long-term fundamentals,” Deane said. “At the same time, the increased use and adoption of Bitcoin in high inflation economies creates a confusing picture of the market leading to a lack of decisive direction and momentum in either direction.”