Bitcoin Drops Another 8% As Cryptocurrencies Extend Big Losses

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Alec Monopoly paints a bitcoin on a mural during the North American Bitcoin Conference held at the James L Knight Center on January 18, 2022 in Miami, Florida.

Joe Raedle | Getty Images

Cryptocurrencies continued their dramatic slide on Saturday, with bitcoin losing nearly half of its value since hitting its November peak.

Bitcoin, the world’s most valuable cryptocurrency by market value, fell about 8% on Saturday to trade just above $35,000. The coin reached a record high of $69,000 in November.

Meanwhile, Ether, the second-largest cryptocurrency by market cap, fell nearly 10% to trade around $2,400.

The losses came on the heels of a stock market decline on Thursday. Cryptocurrencies and traditional equities fell in tandem this month as investors worried about the impact of planned Federal Reserve interest rate hikes on the market.

A common investment case for bitcoin is that it serves as a hedge against rising inflation following government stimulus, but analysts say the risk is that a more hawkish Fed could cut the wind from crypto market sails.

There are also fears that US regulators will crack down more on digital currencies.

The Russian central bank proposed banning the use and mining of cryptocurrencies earlier this week. Officials argued that this threatened financial stability, the well-being of citizens and its sovereignty over monetary policy. US authorities have also clamped down on some aspects of the market.

—CNBC’s Weizhen Tan contributed to this report.

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