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Bitcoin slides below $20,000 to lowest level in 18 months
The digital currency sector has been pummeled this week after cryptocurrency lending company Celsius froze withdrawals and transfers between accounts, while crypto companies started laying off employees. There also were reports that a cryptocurrency hedge fund had run into trouble.
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Representations of virtual currency Bitcoin are seen in this picture illustration taken on March 13, 2020. (REUTERS/Dado Ruvic)
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itcoin tumbled more than 13 percent at one point on Saturday, crashing below the closely watched $20,000 level to its weakest level in 18 months, as it extended a slide on investor worries about growing troubles in the industry and the general pull-back from riskier assets.
The digital currency sector has been pummeled this week after cryptocurrency lending company Celsius froze withdrawals and transfers between accounts, while crypto companies started laying off employees. There also were reports that a cryptocurrency hedge fund had run into trouble.
The developments have coincided with an equities slide, as US stocks suffered their biggest weekly percentage decline in two years on fears of rising interest rates and the growing likelihood of recession.
The accelerated pace and depth of bitcoin losses in conjunction with the stocks rout could challenge support for the cryptocurrency from a range of investor groups.
While some institutions purchased bitcoin hoping it would offset declines in stocks and bonds, "it hasn't demonstrated that it is an uncorrelated asset," said Michael Purves, founder and chief executive officer of Tallbacken Capital.
"The case for institutions to buy the dip is more challenged now given that the utility for bitcoin has yet to be proven," he said.
"I think this is going to slice through $15,000," he said. "There is so much velocity on the downside."
