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Saturday, Feb 22, 2025

Bitcoin value drops by 50% since November peak

Bitcoin value drops by 50% since November peak

The value of Bitcoin continued to fall over the weekend as it dropped below $34,000 (£27,630), according to the Coinbase cryptocurrency exchange.
The world's largest cryptocurrency by market value has now fallen by 50% since its peak in November last year.

The slide in the value of digital assets comes as stock markets around the world also dropped in recent days.

On Monday, some Asian markets headed lower again with Japan's benchmark Nikkei index down by around 2%.

Bitcoin accounts for about a third of the cryptocurrency market with a total value of $650bn.

Ethereum, the second biggest cryptocurrency in the world, has also fallen in value, down by more than 10% in the last week.

Although much of 2022 had been relatively quiet for the cryptocurrency market, volatile trading in digital assets has not been that unusual in previous years.

Trading was dominated for years by individual investors, but more recently the market has seen an influx of professional investors, such as hedge funds and money managers.

With more traditional investors trading digital assets, cryptocurrencies have increasingly followed the movements of global stock markets.

Many of the institutional investors that buy cryptocurrencies treat them as risk assets, similar to technology stocks.

In times of market uncertainty traditional investors will often sell what they see as riskier assets and move their money into safer investments.

Last week, central banks around the world, including the US, UK and Australia, raised interest rates as they attempt to tackle rising prices.

The US Federal Reserve raised its key lending rate by half a percentage point, marking its biggest rate hike in more than 20 years.

That has triggered more concerns among some investors that inflation and the higher cost of borrowing could have a major impact on global economic growth.

Investors are also worried about the impact of the war in Ukraine on the world economy.

Meanwhile, in the last year Bitcoin has become legal tender in two countries - El Salvador and the Central African Republic.

Since El Salvador said it would allow consumers to use the cryptocurrency in all transactions, alongside the US dollar, the International Monetary Fund has urged it to reverse its decision.
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