Bitcoin prices have fallen sharply amid the global sell-off in stocks.
Luke MacGregor | Bloomberg | Getty Images
Bitcoin fell sharply along with other assets on Friday, hitting a six-week low and officially entering bear market territory.
The world’s largest cryptocurrency fell 8% in the past 24 hours to $ 54,177, its lowest level since early October, according to Coin Metrics data. Bitcoin is down 20% from an all-time high of nearly $ 69,000 earlier this month.
Bear markets are typically defined by a decline of 20% or more from recent highs.
Other cryptocurrencies also crashed on Friday. Ether, the second largest cryptocurrency, fell nearly 11% to $ 4,027, while XRP slumped 11% to around 94 cents.
Digital currencies, along with other risk assets, are falling amid panic over a new, heavily mutated variant of the coronavirus first discovered in South Africa.
The World Health Organization briefed on Thursday about the new variant, known as B.1.1.529, which is believed to contain more than 30 mutations. As a result, the UK and other nations temporarily suspended flights from six African countries.
Global equity markets fell on Friday, with European stocks anticipating their worst trading session in more than a year and US stock futures falling sharply.
Investors are pulling out of riskier assets for reasons of relative security on bonds, with US Treasury bond yields falling sharply. Bond yields move in the opposite direction to prices.
Bitcoin has often been described by its proponents as “digital gold”, an indication of the yellow metal’s status as a so-called safe haven.
Crypto investors say the virtual currency offers both a store of value and a hedge against inflation.
It’s worth noting that Bitcoin is a volatile asset and is known to experience price fluctuations greater than 10% in a single day.