Bitcoin and other cryptocurrencies are losing value—Bitcoin has fallen below the $27,000 mark, owing to the crypto crisis and Terra losses.
As the cryptocurrency sell-off continues, Bitcoin slipped below the $27,000 (€25,000) mark.
According to Coin Metrics, the price of Bitcoin was recently down nearly 9% to $26,848.20 (€25,659) on Thursday.
The significant decline comes after the US Bureau of Labor Statistics published higher-than-expected consumer prices in April, prompting investors to liquidate riskier assets like cryptocurrency. Meanwhile, the price of Ether has dropped by more than 23%.
Since the beginning of the week, the cryptocurrency markets have been under pressure. On Monday, Bitcoin sank to its lowest level since January, as falling equity markets weighed on cryptocurrencies, which are now trading in line with so-called riskier assets such as tech stocks.
Late Monday, bitcoin briefly fell below $30,000 (€28,400), topping the January low of $32,951 (€31,361.77).
In July 2021, Bitcoin fell below that threshold for the first time.
According to CoinMarketCap, it has rebounded somewhat to $31,491 (€29,877) on Tuesday.
Terra also frightens investors. TerraUSD, its stablecoin, fell nearly completely this week, losing its $1 peg to the dollar. UST was trading at at 62 cents on Thursday morning, much below its $1 peg.
Due to its algorithmic stablecoin UST de-pegging from the USD and dropping to as low as 22 cents, Terra’s sibling coin Luna plunged a catastrophic 97 percent. The algorithmic stablecoins will be backed by a variety of digital assets, including Bitcoin.
Meanwhile, Solana and Avalanche, two smart contract platforms, have dropped by over 40%.
Cryptocurrencies have been under pressure because the Nasdaq, which is heavily weighted in technology, plummeted 1.5 percent last week and is down 22% year to date, as concerns grow about inflation and whether the Federal Reserve can bring prices down without triggering a recession.