Bitcoin Enters Bear Market Territory as Risky Assets Plummet with New Variant of Covid.
Bitcoin fell sharply along with other assets on Friday, hitting a seven-week low and officially entering the bear market territory. According to Coin Metrics, the world's largest cryptocurrency is down nearly 8% in the last 24 hours at $54,321. This slide brought Bitcoin to its lowest level since early October.
Bitcoin is down more than 20% from its all-time high of $69,000 earlier this month. A bear market is usually defined as a decline of 20% or more from a recent high.
Other cryptocurrencies also fell on Friday. Ether, the second-largest cryptocurrency, fell more than 10% to $4059, while XRP fell 9.9% to 95 cents.
Digital currencies, along with other risky assets, are falling amid fears of a new, highly mutated strain of coronavirus first discovered in South Africa. The World Health Organization (WHO) held a briefing on Thursday on a new strain known as B.1.1.529, which is believed to contain more than 30 mutations. As a result, the UK and other countries have temporarily suspended flights to six African countries.
Global stock markets fell on Friday. European stocks posted their worst day in a year, and US stock futures plunged. Investors are moving away from riskier assets for bond safety as US Treasury yields plummet. The yield of a bond is inversely proportional to its price.
Bitcoin is often described as "digital gold" by its proponents, indicating that the yellow metal is a so-called safe-haven asset. Cryptocurrency Investors Say Cryptocurrency Offers Inflation Protection As well as Store of Value. Bitcoin is a highly volatile asset and has been known to fluctuate more than 10% in price per day.