On Wednesday, the gloom engulfing the world markets drove cryptocurrencies like Bitcoin lower. However, the biggest crypto, which was trading at around $19,500 at the time of writing had recovered from today’s low of $18,700. Bitcoin earlier dropped as much as 3.1% close to a one-week low. Most other popular coins, including Ether, also experienced losses.
Under a toxic concoction of sharp interest-rate increases, high inflation, and a gloomy economic outlook, stocks, bonds, and commodities are collapsing. The dollar gauge is at a record high in response to the demand for a haven from the storm.
If there is any solace for cryptocurrency investors, it is the fact that other assets are breaking through significant thresholds while Bitcoin is still about 6% above its June lows.
For instance, the US 10-year Treasury yield hit 4% for the first time since 2010, Asian stocks are at levels last seen at the start of the pandemic, and the pound is trading near record lows against the dollar.
On the other hand, if cryptocurrency breaches the June floor, that might hurt sentiment toward riskier investments in general as well as digital tokens specifically.
The brokers, lenders, and a sizable hedge fund focused on the sector were all ousted in the crypto crash that sent the MVIS CryptoCompare Digital Assets 100 Index plunging 60% this year. Since reaching its high in November 2021, Bitcoin has lost about $50,000.
Nevertheless, despite the intense pressure on global markets, the cryptocurrency is maintaining its price above its June low. Some people speculate that its current close correlation with stocks may change.
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