The decline of the cryptocurrency market has continued since last week. It mirrors that of the wider stock market.
According to CoinDesk prices, the world’s most popular cryptocurrency, bitcoin, fell to $31,075.70 Monday evening. This is a 10% decrease from Sunday at 5 p.m. ET. Bitcoin’s record-breaking price of $67,802 in November has fallen 54%.
It’s on track to record the worst five-day stretch in five years since March 16, 2020, when it dropped almost 38%.
Ethereum, the second-largest cryptocurrency, dropped Monday to $2286.10. This is almost 10% lower than Sunday’s closing price.
The volatility of cryptocurrencies and Bitcoin is well-known. Individual investors dominated the market for many years, but institutional investors, such as hedge funds and money managers, have begun to take control.
The market moves in tandem with traditional markets as more professionals trade crypto. Many institutional investors who buy crypto treat them as risk assets similar to technology stocks. During turbulent periods, investors tend not to seek out safer corners in the market.
Last week, the stock market fell after the Federal Reserve announced an increase in interest rate by half point. This is the largest increase since 2000 to combat inflation.
Jerome Powell, Fed Chairman, said that further increases might be this summer. A portion of the central bank’s $9 trillion asset portfolio is being unwinded.
The tech-heavy Nasdaq Composite fell 26% year-to-date to a 52-week low on Monday.
As investors prepare for rising interest rates, crypto prices have been stagnant since 2022.
According to CoinMarketCap, the crypto market was active for 24 hours. There has been almost $155 billion of market volume during that time. The global crypto market dropped to $1.4 trillion.
Companies specializing in the cryptocurrency have worked hard to make themselves household names. Crypto platforms are flooded with venture capital investment. They have been spending more money on lobbying and direct marketing to consumers.