LONDON — The price of bitcoin fell below $20,000 on Saturday for the first time since late 2020, in a fresh sign that the cryptocurrency sell-off is deepening.
Bitcoin, the most popular cryptocurrency, fell below the psychologically important threshold, falling as much as 9% to below $19,000 and hovering around that mark, according to cryptocurrency news site CoinDesk.
The last time bitcoin was at these levels was in November 2020, when it was on course for its all-time high of nearly $69,000, according to CoinDesk. Many in the industry had believed it would not go below $20,000.
Bitcoin has now lost more than 70% of its value since hitting that peak.
Ethereum, another widely used cryptocurrency that has tumbled in recent weeks, experienced a similar tumble on Saturday.
It is the latest sign of turmoil in the cryptocurrency industry amid larger turmoil in financial markets. Investors are selling riskier assets as central banks raise interest rates to combat accelerating inflation.
According to coinmarketcap.com, a company that tracks crypto prices, the total market value of cryptocurrency assets has fallen from $3 trillion to under $1 trillion.
A spate of crypto meltdowns has erased tens of billions of dollars in value from currencies and prompted urgent calls for regulation of the freewheeling industry. Bipartisan legislation regulating digital assets was introduced in the US Senate last week. The crypto industry has also ramped up its lobbying – it flooded $20 million in convention races for the first time this year, according to records and interviews.
Cesare Fracassi, a finance professor at the University of Texas at Austin who leads the school’s blockchain initiative, believes Bitcoin’s fall below the psychological threshold isn’t a big deal. Instead, he said the focus should be on the latest news from lending platforms.
Cryptocurrency lending platform Celsius Network announced this month that it was pausing all withdrawals and transfers, with no indication of when it would allow its 1.7 million customers access to their funds.
“There is a lot of turbulence in the market,” Fracassi said. “And the reason prices are falling is because there are many concerns that the sector is overleveraged.”
Cryptocurrency exchange Coinbase announced on Tuesday that it has laid off about 18% of its workforce, with the company’s CEO and co-founder Brian Armstrong blaming some of the blame on an upcoming “crypto winter.”
Stablecoin Terra imploded last month, losing tens of billions of dollars in value in a matter of hours.
Crypto had permeated much of popular culture prior to its recent slump, with many Super Bowl ads promoting the digital assets and celebrities and YouTube personalities routinely promoting it on social media.