Bitcoin drops to 22-month low as equity markets pull back

Bitcoin fell to its lowest level since July on Monday, as falling equity markets continued to put pressure on cryptocurrencies, which are currently trading in line with riskier assets such as tech stocks.

Bitcoin plunged to $32,763.16 shortly before 8:00 am ET, in its fifth consecutive session of decline. At 11:58 am, it was down 4.5%, to US$ 32,491.78 (R$ 164,800).

The cryptocurrency is down 13% so far in May and has lost more than half its value since hitting an all-time high of $69,000 in November last year.

“I think everything within cryptocurrency is still classified as a risky asset, and similar to what we saw with Nasdaq, most cryptocurrencies are under attack,” said Matt Dibb, COO of cryptocurrency platform Stack Funds, based in in Singapore.

The Nasdaq index tumbled 1.5% last week and lost 22% year-to-date, hampered by the prospect of persistent inflation forcing the Federal Reserve to raise rates. The Nasdaq was down 3% in the early afternoon.

Dibb said other factors behind the weekend’s decline — bitcoin closed Friday at around $36,000 — were low liquidity in the cryptocurrency market and fears. short-lived that the algorithmic stablecoin called Terra USD (UST) could no longer be pegged to the dollar.

UST is closely watched by the cryptocurrency community, both because of the new way in which it maintains its 1:1 dollar peg and because its creators have established plans to build a reserve of US$10 billion. billion) in bitcoins to support the stablecoin, meaning volatility in the UST could potentially spill over into bitcoin markets.

Ether, the world’s second-largest cryptocurrency, dropped to $2,360 on Monday, the lowest since late February. In the early afternoon, the digital currency was down 5.1%, at US$ 2,394.85 (R$ 12.1 thousand).