Originally released On: 12 Dec 2021 via blockchain.news (Link below)
Why has Bitcoin price dropped below $40,000?
Bitcoin prices fell sharply on Friday, while ether prices also dived, wiping off nearly $150 billion from the crypto market.
Bitcoin fell about 15% and was trading around $36,000 late Friday, according to Coin Metrics. The second-largest cryptocurrency by market cap, Ethereum, dived almost 20% to trade around $2,500.
The declines in cryptocurrencies follow Wall Street losses on Thursday. The Nasdaq Composite lost 7.6% this week, and the S&P 500 fell 5.7% for its third straight weekly decline.
An article from CNBC directs the cause several points:
- Rising rates have prompted investors to shed positions in riskier assets. Earlier this week, the benchmark 10-year Treasury yield traded above 1.9%.
- The Federal Reserve has also indicated it plans to begin reducing its balance sheet and tapering of bonds and raising interest rates.
- Regulators are cracking down on cryptocurrencies too. China is banning all crypto-related activities altogether, and U.S. authorities are also clamping down on specific aspects of the market.
- Russia’s central bank had proposed a ban over the use and mining of cryptocurrencies on Russian territory. They claim that digital currencies pose a risk to “financial stability and monetary policy sovereignty.”
In the case of many long term investors, when executing an accumulation strategy the volatility of the BTC market offers further opportunities. Even with the latest Bitcoin price action, Anthony Pompliano recommends that you continue to stack sats. Check out his video below to get a macro perspective.
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