Bitcoin fell alongside stock markets on Monday, plunging below $17,000 (£20,774) at prices not seen since October 2020.
bitcoin (BTC-USD) fell 2.1% in the past week from below $17,000 to $16,761.
About $2 billion in value was erased from the total crypto market in just over 12 months, according to Coingecko.
Check: Live Crypto Prices
Risky assets such as cryptocurrencies and stocks are still under pressure after the US Federal Reserve warned that it may have to continue to tighten monetary policy until 2023.
Fed Chairman Jerome Powell’s warning that the US central bank has “more work to do” spooked stock markets. Bitcoin, and by extension the entire cryptocurrency market, has shown a tendency to keep pace with the Nasdaq (^IXIC) and S&P 500 (^GSPC).
After raising rates by 0.5 basis points last Wednesday, Powell said: “We continue to expect continued increases in the target range to be appropriate to achieve a monetary policy stance tight enough to bring inflation down to 2 % over time. .”
Analysts read this as a signal that more aggressive hikes would be needed going forward to stifle rising dollar inflation.
The tech-heavy Nasdaq Composite closed down 1% on Friday. The S&P 500 slipped 1.1% and the Dow Jones Industrial Average (^ DJI) was down 0.9%.
More market troubles followed as BlackRock (noir), the largest asset manager in the world, warned the Fed won’t “climb to the rescue” in 2023 as equity valuations falter and “don’t yet reflect the damage to come.”
Reacting to investor caution, Ethereum (ETH-USD) followed bitcoin’s path, falling around 3.1% to $1,205.
However, good news for ethereum holders came recently when the Commodity Futures Trading Commission (CFTC) in the United States recognized ethereum, alongside bitcoin, as a commodity.
Bitcoin has fallen 75% since hitting an all-time high of $69,000 in November 2021.
The current bear market has proven to be more intense than those seen previously, with the CoinDesk Market Index (CMI), the benchmark of 167 digital assets, down 3.3% on Monday.