The price of the leading cryptocurrency Bitcoin fell below $43,000 earlier today, testing multi-month lows after minutes from the Federal Reserve’s last meeting showed it leaning toward more aggressive policy action, which sapped investor appetite for riskier assets. Bitcoin was last at $42,700, down 1.7%, having lost 5.2% on Wednesday. A break below last month’s trough of $42,000 would make bitcoin the weakest since September.
Cryptocurrency markets are aligning with those in traditional markets.
The original cryptocurrency bitcoin hit a record high of $69,000 in November. The current fall “correlated with the ‘risk off’ move across most traditional asset classes,” said Matt Dibb, COO of Singapore-based crypto fund distributor, Stack Funds, pointing to the declines in the Nasdaq in particular. Moves in cryptocurrency markets are becoming more aligned with those in traditional markets as the number of institutions trading both crypto and other assets grows. Along with bitcoin, several other major cryptocurrencies also were in red earlier today.
Nasdaq plunged more than 3% overnight in its biggest one-day percentage drop since February.
The Nasdaq plunged more than 3% overnight in its biggest one-day percentage drop since February, after Fed minutes showed U.S. policymakers had discussed reducing the bank’s balance sheet at their December meeting when they also decided to accelerate finishing their bond-buying program. Share markets in Asia also sold off on Thursday, while U.S. Treasury yields edged higher. World’s second-leading cryptocurrency in market cap, Ethereum, also lost 5.2% on Wednesday and touched its lowest level since October before bouncing back slightly to $3,460. Crypto analysts were also watching to see whether anti-government protests in Kazakhstan, which were initially sparked by rising fuel prices, would affect the bitcoin network.