LONDON — The price of bitcoin fell below $20,000 on Saturday for the first time since late 2020, another sign that the cryptocurrency selloff is intensifying.
Bitcoin, the most popular cryptocurrency, fell below the psychologically important threshold, dropping as much as 9% to below $19,000 and hovering around that mark, according to the cryptocurrency news site CoinDesk.
The last time bitcoin was at this level was in November 2020, when it was close to hitting its all-time high of nearly $69,000, according to CoinDesk. Many in the industry had believed it would not fall below $20,000.
Bitcoin has now lost over 70% of its value since hitting that peak.
Ethereum, another widely followed cryptocurrency that has slid in recent weeks, suffered a similar drop on Saturday.
This is the latest sign of turmoil in the cryptocurrency industry amid broader financial market turmoil. Investors are selling riskier assets because central banks are raising interest rates to fight rising inflation.
The overall market value of cryptocurrency assets has fallen from $3 trillion to less than $1 trillion, according to coinmarketcap.com, a company that tracks crypto prices.
A series of crypto meltdowns have wiped tens of billions of dollars worth of currencies and sparked urgent calls to regulate the freewheeling industry. Last week, bipartisan legislation was introduced in the US Senate to regulate digital assets. The crypto industry has also stepped up its lobbying efforts — flooding $20 million in congressional 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 drop below the psychological threshold isn’t a big deal. Instead, he said the focus should be on recent news from lending platforms.
Cryptocurrency lending platform Celsius Network said this month it was suspending all withdrawals and transfers, with no sign of when it would give its 1.7 million customers access to their funds. .
“There’s a lot of turbulence in the market,” Fracassi said. “And the reason prices are falling is there’s a lot of concern that the sector is over-leveraged.”
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 within hours.
Crypto had permeated much of popular culture before its recent downfall, with many Super Bowl ads touting digital assets and celebrities and YouTube personalities regularly promoting it on social media.