The Bitcoin (CRYPTO: BTC) price is falling hard, down 8% since this time yesterday.
At time of writing, the world’s biggest token by market cap is trading for US$40,639 (AU$56,558).
That slide sends the Bitcoin price down 5% for the week and increases its losses to 15% so far in 2022.
As for crypto investors who bought at 10 November’s all-time highs? They’re in the red by some 41%, according to data from CoinMarketCap.
Why is the Bitcoin price tumbling today?
The Bitcoin price is following the broader selloff in risk assets.
Investor jitters saw the tech heavy Nasdaq plummet 2.9% in Thursday’s trading.
Here in Australia, the S&P/ASX All Technology Index (ASX: XTX) is on a similar path. The All Tech index is currently down 2.2%. That’s twice the losses posted by the broader All Ordinaries Index (ASX: XAO) at this same time.
Investors have predominantly been spooked by two events recently.
Firstly, the unexpectedly high inflation figures coming out of many developed nations, including the United States, the world’s biggest economy. This is seeing the US Federal Reserve, and likely other central banks including the Reserve Bank of Australia, usher in interest rate hikes sooner than expected.
Higher interest rates tend to see growth shares sell off. And Bitcoin has lately been closely tracking the fortunes of high growth stocks.
Secondly, and the more dominant driver to the current Bitcoin price slide, is investor fears over a potential Russian invasion of Ukraine. While Russia says it has no intentions to do so, the United States says an invasion could happen any time.
Commenting on the Bitcoin price plunge, Barbara Matthews, CEO of BCMStrategy said (quoted by Bloomberg), “The geopolitical situation in Europe and Ukraine is having material impact. But I think it’s underappreciated how much monetary policy continues to generate uncertainty and volatility in the markets.”
Not such a haven asset at the moment
Crypto enthusiasts will be disappointed to see that the Bitcoin price has not held up under increased global uncertainty.
As the token has gained greater institutional adoption, many have been touting Bitcoin as an alternate haven asset to the likes of gold.
However, the facts don’t support that.
ASX gold shares have been surging today amid rising uncertainty, while the Bitcoin price has decidedly gone the other way.
The post The Bitcoin price just fell 8%. What’s going on? appeared first on The Motley Fool Australia.
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More reading
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- How this tech giant could ‘put booster rockets’ under crypto: expert
- How this key metric bodes well for the Bitcoin price
- Why is the BetaShares Crypto Innovators ETF (ASX:CRYP) leaping 5% today?
- Ethereum and Bitcoin price in focus as world’s biggest asset manager eyes cryptos
The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Bitcoin. The Motley Fool Australia owns and has recommended Bitcoin. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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