Bitcoin Tumbles to Lowest Value Since July 2021

By Naveen Athrappully
Naveen Athrappully
Naveen Athrappully
Naveen Athrappully is a news reporter covering business and world events at The Epoch Times.
May 9, 2022 Updated: May 9, 2022

The cryptocurrency bitcoin fell to its lowest value since July 2021 during May 9 trading amidst a fall in stock indexes as central banks around the world raised key interest rates.

After opening at about $34,000, bitcoin was trading at $32,152 as of 16:38 UTC (12:38 p.m. Eastern time). Compared to the 2022 peak of approximately $47,500 hit on March 29, bitcoin is trading lower by 33 percent. This is the lowest level since July 2021 and 53 percent lower than the all-time high of $69,000 hit in November 2021. Bitcoin has registered four consecutive daily declines and has lost 13 percent of its value in May 2022.

On May 9, the Financial Times Stock Exchange 100 Index in London fell about 1.5 percent, and Japan’s Nikkei Index declined by 2.5 percent. In the United States, Nasdaq and S&P 500 both fell by over 1 percent in opening trade.

The tech-heavy Nasdaq lost more than 22 percent in 2022 and declined by 1.5 percent the week of May 2 under the prospect of the Federal Reserve raising interest rates due to persistent high inflation.

Central banks around the world, including in Australia and the United Kingdom, have raised interest rates in an attempt to rein in inflation. In the United States, the Fed recently raised rates by 50 basis points, its biggest hike in over 20 years.

These moves have resulted in investor apprehension regarding rising prices, which, when combined with higher borrowing costs, could weigh down economic growth. The ongoing war in Ukraine also adds to the uncertainty.

During times of such uncertainty, traditional investors usually prefer safer investments rather than volatile, risky assets like cryptocurrencies.

“I think everything within crypto is still classed as a risk asset, and similar to what we’ve seen with the Nasdaq, most cryptocurrencies are getting pummelled [sic],” said Matt Dibb, chief operating officer of Singapore-based crypto platform Stack Funds, in a Reuters report.

Digital currency markets were also tense during the weekend after stablecoin TerraUSD briefly lost its peg to the U.S. dollar. Cryptocurrency investors closely track TerraUSD due to its 1:1 dollar peg, which also means that volatility in the stablecoin could spill over into bitcoin as well.

Moreover, bitcoin has been attracting negative press of late. Billionaire Warren Buffet dismissed cryptocurrencies at the April 30 annual meeting of Berkshire Hathaway, insisting that these are not “productive” assets.

“If you told me you own all the Bitcoin in the world, and you offered it to me for $25, I wouldn’t take it because what would I do with it?” he said. “That explains the difference between productive assets and something that depends on the next guy paying you more than the last guy got.”

In an interview with CNBC, Vijay Ayyar, vice president of corporate development and international at cryptocurrency exchange Luno, warned that bitcoin could drop to $25,000 if it breaks the $30,000 support level.

Naveen Athrappully is a news reporter covering business and world events at The Epoch Times.