Bitcoin dipped below $30,000 on Wednesday, representing a more than 50% decline from its high in November.
The flagship cryptocurrency plummeted to as low as $29,197 before ticking up above the $30,000 threshold. Bitcoin had previously peaked at an all-time high of $69,000 in November.
At its Wednesday trough, Ethereum, the second-largest cryptocurrency by market cap, was just over $2,100, while Ripple fell to $0.40 and Cardano dropped to $0.55. For reference, Cardano was trading at nearly $3 at its peak last year, representing a nearly 82% decrease.
While there are many factors at play in Bitcoin's and other cryptocurrencies' downward slide, the digital assets appear to be increasingly tethered to traditional stocks, which have been falling precipitously this week and have been in the red more generally since the start of the year.
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The S&P 500 has plunged more than 16% since January, the Dow Jones Industrial Index has shed more than 4,200 points, and the Nasdaq has shed more than a quarter of its value since the start of the year.
“Bitcoin is breaking below some key technical levels as the never-ending selloff on Wall Street continues,” said Edward Moya, senior market analyst at foreign exchange platform OANDA. “The institutional investor is paying close attention to bitcoin as many who got in last year are now losing money on their investment.”
Last year, as consumer prices were quickly rising, some investors saw Bitcoin and cryptocurrencies more generally as a possible hedge against inflation. That narrative, though, has shifted as Bitcoin has fallen, even as inflation has surged. Consumer prices increased 8.3% in the 12 months ending in April, according to data released on Wednesday.
Losses in the cryptocurrency realm come as the Federal Reserve raised its interest rate target by a quarter of a percentage point in March and by half a percentage point this month in an effort to rein in inflation.
Further adding to volatility in the stock and crypto markets is the war in Ukraine, which has disrupted supply chains and sent energy prices soaring.
Even with the declines, Bitcoin and cryptocurrencies have received increased institutional acceptance.
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Earlier this year, Goldman Sachs became the first major U.S. bank to trade cryptocurrencies over the counter, adding to the legitimacy of digital assets, a move that might portend more major banks following suit.
The world’s largest hedge fund also announced that it is entering the cryptocurrency sphere. Ray Dalio’s Bridgewater Associates said it plans to back its first crypto fund.