Bitcoin value slumps below $20,000 in cryptocurrencies turmoil
The price of bitcoin has fallen below $20,000 (£16,400) amid deepening turmoil in the cryptocurrency market.
The cornerstone digital asset slipped to levels not seen since December 2020 on Saturday morning, at one point going under $19,000 before recovering to about $19,160, according to CoinDesk.
Bitcoin has now lost more than 70% of its value compared with the peak it reached last year.
Bitcoin and other cryptocurrencies have been hit by several factors including rising inflation, which has prompted interest rate rises by central banks. This, in turn, has dampened investor appetite for riskier assets such as cryptocurrencies and has hit global stock markets, with the previously high-flying tech sector affected in particular.
Last week the UK and US central banks raised rates in an attempt to quell rising prices, putting further pressure on digital assets.
Cryptocurrency is the term for a group of digital assets that share the same underlying structure as bitcoin: a publicly available “blockchain” that records ownership without having any central authority in control.
Crypto’s backers have said the sector represents a good investment because, for instance, it carries low fees and, unlike conventional currencies, is not tied to governments. However, its detractors say a lack of regulatory oversight or implicit government support, due to crypto and bitcoin’s independent origins, make it susceptible to scams and wild fluctuations in price.
The crypto market, which trades on a 24-hour basis, is also suffering internal problems that began with the collapse of Terra, a so-called stablecoin whose value was supposed to be pegged to the dollar. Its failure in May shook faith in digital assets, triggering a wave of selling that has
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