- Bitcoin briefly plummeted below $50,000 Monday as U.S. economic fears spread the market rout beyond stocks, leading to about $1.2 billion in crypto liquidations over the past 24 hours.
- Ether, Solana and other alternative crypto assets are down even more than bitcoin.
- Despite bitcoin’s aspirations to be a safe-haven asset, its recent price movements show that it’s still operating as a risk-on asset today.
The price of Bitcoin plunged below $50,000 on Monday, as fears about the U.S. economy sparked a broader market selloff. The sharp drop in Bitcoin’s price led to approximately $1.2 billion in liquidations across the crypto market over the last 24 hours.
Bitcoin Falls Nearly 30% From Recent Highs
After hitting $70,000 just a week ago, Bitcoin fell to nearly $47,000 on Monday morning. This represents a decline of almost 30% from its recent peak. The sell-off in Bitcoin mirrored the declines seen in the stock market, as investors dumped risk assets amid concerns over a potential recession.
Altcoins Experience Even Larger Losses
Alternative cryptocurrencies, commonly known as “altcoins,” saw even steeper declines than Bitcoin. Ether, the second largest cryptocurrency, dropped 24% over the past week. Meanwhile, Solana plunged 28% over the same timeframe.
Crypto-Related Stocks Also Take a Hit
Publicly traded companies with exposure to crypto felt the effects of the simultaneous equities and crypto sell-off. Shares of crypto exchange Coinbase fell 5%, while those of crypto miner Marathon Digital declined by 5%. MicroStrategy, which holds Bitcoin on its balance sheet, saw its stock tumble 9% amid the risk-off environment.
Large Price Swings Not Unusual for Bitcoin
Volatility is nothing new for Bitcoin, even during bull markets. The leading cryptocurrency frequently experiences drawdowns of 20% or more following its quadrennial halving events. Despite its ambitions to serve as a safe haven asset, Bitcoin continues to trade as a risk-on asset during periods of market turmoil.
Long-Term Believers Remain Confident
For longtime crypto investors, the latest bout of volatility has not shaken their long-term convictions about Bitcoin. They maintain the view that Bitcoin will serve as a hedge against fiat currency debasement over the coming years, despite its tendency to move in lockstep with equities over the short term.
