Bitcoin’s cascading losses accelerate in record-breaking rout
- Largest cryptocurrency tumbles as much as 13 per cent on Saturday, breaching US$18,000, as sell-off quickens
- The total market cap of cryptocurrencies was around US$870 billion on Saturday, down from US$3 trillion in November
Bitcoin plunged through several closely watched price levels to the lowest since December 2020 as evidence of deepening stress within the cryptocurrency industry keeps piling up against a backdrop of monetary tightening.
The largest digital token by market value tumbled as much as 13 per cent to US$17,859 on Saturday, marking a record-breaking 12th consecutive daily decline according to Bloomberg data. It is still only the biggest drop since Monday. Ethereum breached US$1,000 and dropped almost 19 per cent to US$891, the lowest since January 2021. The two bellwethers of the cryptocurrency market are both down more than 70 per cent from all-time highs set in early November.
“What we’re seeing is more liquidations driving prices and sentiment lower, which triggers more liquidations and negative sentiment – some flushing-out needed still, but this will at some stage exhaust itself,” said Noelle Acheson, head of market insights at Genesis, one of the largest and best-known lenders in the digital-assets space.
The latest leg down pushed bitcoin below US$19,511, the high the coin hit during its last bull cycle in 2017, which it reached at the end of that year. Throughout its roughly 12-year trading history, bitcoin has never dropped below previous cycle peaks.
Alt-coins were no exception to soured investor appetite in the wake of bitcoin’s fall, with every token on Bloomberg’s cryptocurrency monitor trading in the red. Cardano, solana, dogecoin and polkadot recorded 24-hour falls of between 9 per cent and 12 per cent on Saturday, while privacy tokens such as monero and zcash lost as much as 11 per cent.
A toxic mix of bad news cycles and higher interest rates has been deleterious to riskier assets like cryptocurrency. The Federal Reserve raised its main interest rate on June 15 by three-quarters of a percentage point – the biggest increase since 1994 – and central bankers signalled they will keep rising aggressively this year in the fight to tame inflation.