Bitcoin fell below $26,000 for the first time in 16 months, part of a larger sell-off in cryptocurrencies that wiped out more than $200 billion from the market in a single day.
According to Coin Metrics, the price of bitcoin fell to $25,401.29 on Thursday. This is the first time the cryptocurrency has dropped below $27,000 since December 26, 2020.
Bitcoin has since recovered some of its losses and was last trading at $28,569.25, a 2.9 percent loss.
Ether, the second-largest digital currency, has plummeted to as little as $1,704.05 per coin. This is the first time the token has dropped below $2,000 since June 2021. Ether was last trading down 8.8 percent at $1,937.88.
Investors are fleeing cryptocurrencies at a time when stock markets have plummeted from the coronavirus pandemic’s highs due to concerns about rising prices and a deteriorating economic outlook.
Inflation in the United States rose 8.3 percent in April, exceeding analysts’ expectations and approaching the highest level in 40 years, according to data released Wednesday.
Crypto crash is spreading
The chaos appeared to be spreading to Asia on Thursday, as crypto-related stocks plummeted. BC Technology Group Ltd., a Hong Kong-listed fintech company, closed down 6.7 percent. Monex Group Inc., which owns the TradeStation and Coincheck marketplaces in Japan, lost 10% on the day.
As central banks around the world tighten monetary policy to combat inflation, digital tokens have come under selling pressure as investors flee risky assets. Thursday, S&P 500 futures fell 0.8 percent, tracking losses in the MSCI Asia Pacific Index.
Investors in the crypto space are used to wild market swings, and Bitcoin and Ethereum quickly pared losses to trade down 4.2 percent and 9%, respectively, as of 4:45 p.m. Hong Kong time.