The fall in the value of Bitcoin underscores a broader pullback from risky assets among investors worried about rampant inflation and rising interest rates.
The case for Bitcoin as digital gold has all but been diminished as the price of the crypto has followed falls in global stock markets – and then some. While the FTSE All Share and S&P 500 are down almost 7% and 19% this year, respectively, Bitcoin has lost almost 45% of its value in the same period.
Myron Jobson, Senior Personal Finance Campaigner, interactive investor, said: “Bitcoin has suffered from a dramatic reversal of fortune which has blindsided those who invested in the coin amid the crypto boom during the pandemic. How long the crypto plunge might last remains to be seen, but it is a timely reminder of much and how quickly the value of cryptocurrencies can change unexpectedly.
“Cryptocurrencies have typically rebounded from steep falls in the past, although in some cases it took several years to hit new heights. But past performance is not indicative of future results, and the market environment now is very different. The prospect of further regulatory crackdowns on the crypto industry remains a perpetual threat to the sector.