Bitcoin fell to its lowest level since January on Monday as a collapse in equity markets continued to hurt cryptocurrencies, which are currently trading in line with so-called riskier assets such as tech stocks.
Bitcoin fell to $33,266 in morning trading, testing January’s low of $32,951. The fall below that level would be the lowest since July last year.
Thereafter, it remained stable to trade around $33,500, down 1.4%.
Matt Dibb, COO of Singapore-based crypto platform Stack Funds, said, “I think everything within crypto is still classified as a risk asset, and most crypto as we have seen with the Nasdaq. Currencies are deteriorating.”
The tech-heavy Nasdaq fell 1.5% last week, and has lost 22% year on year so far, hurt by the prospect of persistent inflation forcing the US Federal Reserve to raise rates despite slowing growth. Nasdaq futures were down 0.8% in Monday morning trading in Asia.
Dibb said other factors driving the decline over the weekend – bitcoin closed at around $36,000 on Friday – were the crypto market’s notoriously low liquidity over the weekend, and also short-term fears that an algorithmic stablecoin called Tera USD (UST) could trade against the dollar. You can lose your peg. ,
Stablecoins are digital tokens that are pegged to other traditional assets, often the US dollar.
UST is closely watched by the crypto community, both because it maintains its 1:1 peg to the dollar, and because its founders plan to create $10 billion worth of bitcoin reserves to support the stablecoin. , which means volatility in UST could potentially spread to bitcoin markets.
Ether, the world’s second-largest cryptocurrency that underlies the Ethereum network, fell to $2,421 on Monday, its lowest since late February.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)