May 17, 2022

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Bitcoin drops as Wall Street stocks falter

Bitcoin drops as Wall Street stocks falter

HONG KONG/LONDON/NEW YORK, May 9 (Reuters) – Bitcoin plunged to its lowest level since July 2021 on Monday, coinciding with US stock markets tumbling amid concerns about the path of the Federal Reserve’s violent tightening.

The world’s largest cryptocurrency by market capitalization, Bitcoin fell to $3,0331.28, dropping for the fifth consecutive session. Bitcoin was last down 9.8% to $30,724.

Bitcoin is down 19% so far in May, having lost more than half its value since hitting an all-time high of $69,000 in November last year.

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On Monday, the Standard & Poor’s 500 Index hit its lowest level since April 2021, led by a decline in the shares of large, high-growth companies. The Nasdaq is down more than 3%, while Apple’s stock is down (AAPL.O) Shares also fell more than 3% and were the biggest heavyweights on the Nasdaq and S&P 500.

Alex Miller, CEO of Hiro, believes that “the fluctuations in the market stem from speculation. Because bitcoin is so speculative, its price and the rest of the crypto market is declining along with the general markets.”

Hiro builds developer tools for Stacks, the network that enables applications and bitcoin smart contracts.

Ether, the world’s second largest cryptocurrency used in the Ethereum blockchain, fell to $2,245, its lowest level since late January.

“The most important thing to do to prepare for bear markets is to maintain a balanced portfolio and not overinvest in assets that you cannot afford to wait for the crypto winter with,” Miller said. “As we have seen from every dip ever, the best thing you can do with a long-term asset like bitcoin is to hold, or even increase your position if you are willing to do so.”

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A representation of bitcoin is seen in an illustrative photo taken at La Maison du Bitcoin in Paris, France, June 23, 2017. REUTERS/Benoit Tessier

Despite the weakness in bitcoin prices, funds and related products posted inflows last week of $45 million, according to digital asset manager Coinshares in a report released Monday.

James Butterfell, investment analyst at CoinShares, said investors have benefited from lower bitcoin prices.

The CoinShares report showed that the crypto sector in general also recorded an inflow of $40 million.

Matt Deeb, chief operating officer of cryptocurrency platform Stack Funds, said other factors in bitcoin’s decline came over the weekend during the low liquidity in the cryptocurrency market.

Dib noted that there were also short-lived concerns that the algorithmic stablecoin Terra USD (UST) could lose its peg to the dollar.

Stablecoins are digital tokens that are tied to other traditional assets, often US dollars.

Terrestrial treasuries are closely watched due to the new way it maintains its 1:1 peg and because its founders have laid out plans to build a $10 billion reserve of bitcoin to support the stablecoin, which means that volatility in terrestrial treasuries is likely to leak out. to the bitcoin market. Read more

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Additional reporting by Elon John in Hong Kong, Elizabeth Hocroft in London and Gertrude Chavez-Dreyfus in New York; Editing by Kim Coogle and Will Dunham

Our criteria: Thomson Reuters Trust Principles.