Bitcoin price drops to $50,000
Illustrative photo (Getty Images)
Cryptocurrencies suffered significant losses due to risk aversion in global markets. Bitcoin fell by more than 14%, and the ether (ETH/USD) showed its sharpest drop since 2021, according to Bloomberg.
As of this morning, bitcoin fell to $50,900, the worst result since the collapse of the FTX exchange. The ether lost more than a fifth of its value but then recovered to $2,286. Most of the major cryptocurrencies also ended up in the red.
The drop in cryptocurrencies comes amid a global selloff in stocks caused by concerns about the economic outlook and doubts about the justification for large investments in artificial intelligence. Geopolitical tensions in the Middle East are further increasing investor caution.
On August 2, US exchange-traded funds trading in bitcoin experienced the largest outflow of funds in the last three months.
According to Hayden Hughes of Evergreen Growth, digital assets were hit by yen trading and rising interest rates in Japan.
Since reaching a record high of $73,798 in March, bitcoin has been affected by a variety of factors, including political instability in the United States and the possible sale of bitcoins confiscated by governments.
Sean Farrell of Fundstrat Global Advisors LLC believes that the prospect of a less tight monetary policy is favorable for cryptocurrencies.
According to Coinglass, about $790 million of bullish cryptocurrency positions were liquidated in the last 24 hours.
Over the past year, bitcoin has risen by about 16%, gold by 18%, and global stocks by 8%.
