Bitcoin drops below $33,000 to its lowest since July
Bitcoin continued to slide after a massive sell-off of stocks in the US last week, driving the cryptocurrency market into a frenzy and sending the cryptocurrency down nearly 10%.
Bitcoin Dropped May 10, 2022
- Bitcoin, the world's largest digital currency by market capitalization, fell 5 percent to $3,2860.91 at about 7:12 a.m. ET, according to data from Coindesk.
- Bitcoin hit an intraday low of $32,650.02, its lowest since July 2021. The virtual currency has been trading in a tight range this year as it attempts to regain its highs in late 2021.
- It is now down more than 50 percent from its peak price of $68,990.90 in November 2021.
- The drop comes after the blue-chip Dow Jones Industrial Average lost more than 1,000 points on Thursday and the Nasdaq fell 5 percent. Those losses marked the worst one-day decline since 2020. The Dow and Nasdaq fell again on Friday.
- Meanwhile, the Federal Reserve on Wednesday raised its benchmark interest rate by half a percentage point in response to inflationary pressures.
- The stock market rebounded after Federal Reserve Chairman Jerome Powell said a 75 basis point rate hike was not being considered. But by Thursday, investors erased the gains of the Fed's rally.
- “Markets in general remain under pressure from inflation and growth concerns,” said Vijay Ayyar, vice president of corporate and global development at crypto exchange Luno.
- He said that if the bitcoin price drops below $30,000, it could drop further to $25,000 before any “significant” move up.
- The global cryptocurrency market capitalization reached $1.68 trillion on Sunday, according to data from CoinGecko.com, with cryptocurrency trading in the last day reaching $119 billion.
- Cryptocurrency investors were also on edge over the weekend after the stablecoin TerraUSD briefly lost its peg to the dollar.
- A stablecoin is a digital currency designed to correlate its value with real-world assets. Stablecoin issuers often back their virtual coins with other assets held in reserves. In this case, TerraUSD is meant to be pegged to the US Dollar.
- The Luna Foundation Guard, which is behind TerraUSD, is buying large amounts of bitcoin in its reserves.
- However, TerraUSD price briefly slipped away from parity with the US Dollar over the weekend before recovering. This sparked concerns that the Luna Foundation Guard would sell bitcoin to support TerraUSD.