By CTN News
According to CoinDesk, Bitcoin, the world’s most valuable cryptocurrency, fell below $37,000 Friday to its lowest dollar value since August 2021. The price settled at $36,689.39, down 11% from Thursday’s close and down 46% from the record set in November 2021.
The price decline came after the stock market swooned late on Thursday afternoon.
Since the start of the year, cryptocurrencies and stocks have fallen together, reflecting investor concern about how a series of expected Federal Reserve interest-rate increases will affect the markets.
The cryptocurrency market is no longer an isolated risk asset and is responding to changes in global policies, said Clara Medalie, director of research at cryptocurrency data provider Kaiko. We shouldn’t be surprised that both will become more volatile as liquidity taps disappear.”
In Kaiko’s estimation, the correlation between bitcoin and the stock market is at its highest level since September 2020. That means that when the stock market plunges, so does bitcoin.
Those side-by-side movements have fluctuated over time, with long stretches when bitcoin and other cryptocurrencies moved according to their own impulses.
Among investors, the widespread adoption of cryptocurrencies may have increased their sensitivity to stock market declines.
This week’s decline in bitcoin’s dollar value coincided with a 20% fall in Netflix’s shares, erasing more than $40 billion in market capitalization. Netflix also plans to add a much smaller number of subscribers this quarter than it did last year.
It is believed that selloffs among popular tech stocks may drive investors to liquidate crypto holdings to limit overall losses and meet margin calls, which require brokers to deposit cash to cover losses on trades made with borrowed capital.
Source: chiangraitimes.com
