At the London trading session on Monday, bitcoin sank to its lowest level in over 18 months, as the fallout from Friday’s surprise US inflation statistics continued to resonate through global risk assets.
The world’s most valuable digital asset, bitcoin, fell as high as 8.9% to $24.9K, its lowest level since December 2020.
As a general sell-off proceeded, other cryptocurrencies fell as well. Altcoins were hammered the hardest, with ether hitting its lowest point in almost 14 months. Ethereum was recently trading at around $1,450, down more than 15% from its weekend high.
- Historically, altcoins have underperformed the flagship crypto-asset during high uncertainty, and thus now face the added pressures of potential regulatory bottlenecks due to the nature of their issuance, particularly via token sales and similar methods.
- After a massive bull run in 2020 and 2021, the crypto market has been volatile all year, but the current Crypto Winter began in earnest in the first week of May when major currencies plummeted alongside the stock market.
- The Terra ecosystem (UST and LUNA) then imploded (albeit a Chainalysis research released this week connected Bitcoin’s loss to the broader tech stock selloff, not Terra). Since then, tech stocks have continued to plummet, and cryptocurrency prices have plummeted even lower.
- The future of digital assets, which have been increasingly associated with equity markets over the past year, is at best gloomy in the near term
- Crypto asset’s price weaknesses are also triggered by equity market sell-offs after the latest CPI, as some market experts expected to be slightly better for consumers, jumped to 8.6% annually, a more than four-decade high, implying that inflation is here to stay.