Bitcoin falls below $26,000, tether briefly edges down from $1 peg
Bitcoin plunged and the world’s largest stablecoin, tether, briefly edged down from its $1 peg, adding to fears of more turbulence in the cryptocurrency market.
Cryptocurrencies have been hit by two forces this week. On one side, concerns that inflation will necessitate aggressive central-bank tightening have sapped the desire to hold assets perceived as higher risk. On the other, the decoupling of TerraUSD, a stablecoin whose value was tied to $1, has sent ripples through digital assets.
Bitcoin fell as low as $25,402.04 Thursday, down 10% from its 5 p.m. ET level Wednesday, its lowest level since December 2020, before rebounding to about $27,500, according to CoinDesk. Bitcoin had fallen the last seven consecutive days through Wednesday—its longest losing streak since March 2020, according to Dow Jones Market Data. Ether tumbled 7.4% from Wednesday evening to trade at $1,880.99 Thursday—its lowest level since July 2021.
Cryptocurrencies have come under pressure in recent days alongside stock markets. Digital assets are increasingly moving in lockstep with equities as traditional money managers such as hedge funds and family offices have entered the space during the last two years, analysts say. Such funds may be more likely to sell crypto holdings during periods of volatility rather than hold them.
Stocks staggered Wednesday as inflation proved to be stickier than economists had anticipated, heightening concerns about how much the Federal Reserve may have to further tighten financial conditions to curb inflation. Investors are worried that aggressive interest-rate increases could weigh on growth, already a concern with Covid-19 lockdowns in some Chinese cities and the war in Ukraine.
Crypto has also been hit by a
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