Bitcoin fell below the $27,000 (€25,000) level as the sell-off in the cryptocurrency world continues.
The price of Bitcoin was last down nearly 9 per cent to $26,848.20 (€25,659) on Thursday, according to data from Coin Metrics.
The sharp drop comes after the US Bureau of Labor Statistics reported consumer prices for April were higher than expected, causing investors to sell off riskier assets such as cryptocurrencies. Meanwhile, the price of Ether shed more than 23 per cent.
The cryptocurrency markets have been under pressure, especially since the start of the week. Bitcoin fell to its lowest level since January on Monday as slumping equity markets continued to hurt cryptocurrencies, which are currently trading in line with so-called riskier assets like tech stocks.
Bitcoin briefly dropped below the $30,000 (€28,400) level late on Monday, surpassing the January low of $32,951 (€31,361.77). The last time Bitcoin traded below that level was in July 2021.
By Tuesday, it recovered but only slightly to $31,491 (€29,877), according to CoinMarketCap.
Investors are also spooked by Terra. Its stablecoin TerraUSD crashed almost completely at one point this week and lost its $1 peg to the dollar. As of Thursday morning, UST was trading at about 62 cents, far below its $1 peg.
Terra’s sister coin Luna fell a chaotic 97 per cent due to its algorithmic stablecoin UST de-pegging from the USD and falling to as low as 22 cents. The algorithmic stablecoins are meant to be backed by multiple digital assets such as Bitcoin.
Meanwhile, smart contract platforms Solana and Avalanche fell close to 40 per cent.
Cryptocurrencies are also under pressure since the tech-heavy Nasdaq fell 1.5 per cent last week and has lost 22 per cent year to date as anxiety builds around inflation and if the Federal Reserve can bring prices down without sparking a recession.