For the first time since July 2021, bitcoin is falling below $ 30,000

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For the first time since July, bitcoin has fallen below $ 30,000 as rising interest rates are forcing investors to flee the riskiest corners of global financial markets.

According to Refinitiv, the digital token, the most actively traded in the world, fell $ 29,730 in trading in Asia on Tuesday before recovering to about $ 32,000 in European activity. It fell more than 50 percent from its November high.

Other digital assets have also come under heavy pressure in recent weeks, with the market value of the top 500 digital assets halving from a record reached in November 2021 to $ 1.6 trillion, CryptoCompare data collected Financial Times to show.

The decline of the crypt comes at a time when investors have given up speculative financial assets after a wave of rising rates by global central banks has sparked controversy in the markets. Other risky assets, such as stocks of unprofitable companies and unnecessary bonds, also came under pressure, but cryptocurrencies were hit particularly hard.

The crypto market was booming when central banks pushed interest rates to record lows in the midst of the coronavirus crisis, sending traders on the hunt for high-yielding assets. However, Fr. big sale global government bond markets this year have boosted yields, increasing the potential returns that investors can derive from holding high-end debt.

“It’s a risk to all asset classes, including crypto,” said Daniel Ives, a strategist at Wedbush Securities, who added that “there is nowhere to hide.”

As a sign of how serious the losses are for the crypto market, the FT Wilshire sensor, which tracks the top five digital coins excluding bitcoin, has dropped more than 70 percent from a recent high. Once fast-growing tokens, such as Solana, were exhibited as alternative to the Ethereum network, quickly declined in price.

The share price of cryptocurrency companies has also fallen. The company MicroStrategy, led by crypto lawyer Michael Sailor, has fallen 60 percent this year. Coinbase fell 67 percent in 2022, falling below $ 100 on Monday for the first time since the exchange became public in New York in April 2021.

Firms such as Bitfarms and Marathon Digital Holdings, which use powerful computers to solve puzzles for which they are compensated by digital tokens, have also fallen sharply.

The rollback also showed how the performance of bitcoin and other cryptocurrencies has been closely linked to the U.S. stock market. The correlation between bitcoin and the Nasdaq Composite, a figure weighed against US big technology companies, has reached record highsreports data provider Kaiko.

“Some investors are playing crypto as a hedge against inflation, but it’s trading like a Siamese twin to the Nasdaq,” Ives said.

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