The price of bitcoin is falling again, for more than 6% in 24 hours. Since December 27, the coin has fallen from nearly $ 52,000 to $ 43,500, according to data from CoinGecko.
Bitcoin's dominance in terms of market capitalization has fallen to just over 37%, its lowest level since 2018. But that doesn't mean it's the only crypto asset with a difficult start to January. Elsewhere in the top 10, Ethereum lost almost 8% of its value on Wednesday, Terra suffered losses of 9%, and Solana plunges 10%. Overall, the cryptocurrency market cap is down more than 6% to $ 2.2 trillion. The last time it fell below $ 2 trillion was in September 2021.
It's not just cryptocurrencies that are having a rough day. US stocks were also down after the Federal Reserve indicated it could bring forward its schedule of interest rate hikes to mid-March. In short, the Fed will make borrowing more expensive in order to stabilize the economy and contain rising inflation.
The Dow Jones closed almost 1% lower today after setting a record yesterday. The Nasdaq fell even more sharply, losing 3.3%.
This matters because the price of bitcoin has become increasingly correlated with stock prices throughout 2021, reaching some of its highest levels in December. According to Bloomberg, as of December 3, the 100-day correlation coefficient between the cryptocurrency and the S&P 500 was 0.33, where 1 means they are always moving together and -1 means they are completely divergent.
Other observers have pointed to widespread internet blackouts in Kazakhstan as the reason for the drop in prices, as the country has the second highest rate of Bitcoin mining after the United States.
High fuel prices in the country have led to popular protests and the resignation of the prime minister. Kosovo has also banned Bitcoin mining to deal with power shortages, similar to temporary measures taken by Iran at the end of December.