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- Bitcoin prices extend slide, falling below $85,000 (cbsnews.com)
Bitcoin Takes a Tumble: Crypto Market Sees Significant Selloff
Bitcoin, the world’s leading cryptocurrency, experienced a sharp decline on Monday, with prices temporarily dipping below $85,000. This drop is part of a broader selloff that began in October, raising concerns among investors and impacting related digital assets.
According to data aggregator CoinGecko, Bitcoin’s price plummeted more than 8% in the last 24 hours, reaching $84,096 by 11:15 a.m. on Monday. The cryptocurrency has now lost approximately one-third of its value since its record high of nearly $125,000 on October 6. This significant slump has erased over $750 billion from the digital currency’s total market capitalization.
The ripple effect of Bitcoin’s plunge was felt across the crypto and tech sectors. Mobile trading platform Robinhood saw its stock tumble 3.5%, while Coinbase shares dropped 4.2%. Other major digital currencies, including Ethereum and XRP, also recorded declines.
Why the Downturn? Experts Weigh In
Financial experts attribute the current crypto market slide to a combination of global economic developments and a decrease in investor risk appetite.
A key factor cited by experts is the recent hint from a Bank of Japan official regarding a potential interest rate hike at their upcoming meeting on December 18-19. Higher interest rates typically steer market demand towards safer assets, thereby putting pressure on riskier investments like cryptocurrencies. Arthur Hayes, co-founder of cryptocurrency exchange BitMEX, noted on X, “$BTC dumped [because] BOJ put Dec rate hike in play.”
Nigel Green, CEO of global financial advisory group deVere Group, suggests that the selloff is also indicative of a broader reduction in risk appetite affecting other tech stocks. He highlighted a correlation between Bitcoin’s performance and the Nasdaq Composite, where a 4% pullback in tech stocks has coincided with a nearly 30% drop in Bitcoin’s value. “Bitcoin has increasingly behaved as a leading indicator for broader risk assets, particularly U.S. technology stocks,” Green stated.
Investors are now keenly awaiting the Federal Reserve’s rate decision on December 9-10. While the market is largely anticipating a cut in the Fed’s benchmark interest rate, with an 87% likelihood according to CME FedWatch, this could be accompanied by “more hawkish forward guidance,” cautioned Adam Crisafulli, head of Vital Knowledge. Such guidance could further impact risk assets like Bitcoin, as “there’s a lot of moving pieces beyond just the actual policy decision,” Crisafulli explained.
Despite the current downturn, some experts maintain an optimistic outlook for Bitcoin. Eric Schiffer, CEO of the private equity firm The Patriarch Organization, anticipates a rebound next year as the Federal Reserve continues to ease interest rates. “All of this is short-term,” Schiffer affirmed.
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