Written By Mary Mumbua 📝
According to the Coinbase cryptocurrency exchange, the value of Bitcoin fell below $34,000 (£27,630) over the weekend.
The market value of the world’s largest cryptocurrency has now dropped by half since its peak in November of last year.
The decline in the value of digital assets coincides with a drop in global stock markets in recent days.
On Monday, some Asian markets fell again, with Japan’s benchmark Nikkei index falling 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.
Some investors are concerned that inflation and higher borrowing costs will have a significant impact on global economic growth.
Investors are also concerned about the impact of the Ukraine conflict on the global economy.
Meanwhile, Bitcoin has become legal tender in two countries in the last year: El Salvador and the Central African Republic.
The International Monetary Fund has urged El Salvador to reverse its decision to allow consumers to use cryptocurrency in all transactions alongside the US dollar.
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