The plunge in Bitcoin (BTC) and other cryptocurrencies is accelerating.
Bitcoin has fallen below $27,000 U.S., its lowest level since 2020, as cryptocurrency markets extend losses amid fears over rising inflation and the collapse of a controversial stablecoin.
The price of Bitcoin was as low as $26,595.52 U.S. overnight, according to data from Bitstamp. That marks the first time Bitcoin has sunk below the $27,000 U.S. level since December 2020.
Bitcoin’s price has fallen 15% in the past 24 hours. Meanwhile, Ethereum (ETH), the second-biggest digital currency, fell as low as $1,789 U.S. per coin. It’s the first time that token has fallen beneath the $2,000 U.S. mark since July of last year.
Ethereum has declined 23% in the last 24 hours.
Investors are fleeing cryptocurrencies at a time when stock markets have plunged from the highs of the pandemic on fears over soaring prices and a deteriorating economic outlook.
The latest U.S. inflation data showed prices for goods and services rose 8.3% in April, higher than expected by analysts and close to the highest level in 40 years.
Also weighing on investors is the downfall of embattled stablecoin Terra.
Terra, or UST, is supposed to mirror the value of the U.S. dollar, but it plummeted to less than $0.30 U.S. earlier this week, shaking investors’ confidence in decentralized finance (DeFi).
This morning (May 12), UST is trading at $0.62 U.S., still well below its intended $1 U.S. peg to the greenback.
Adding to investors’ fears has been a drop in the value of Tether, the world’s biggest stablecoin. The token at one point slipped below $0.99 U.S. Economists have long feared that Tether may not have the required amount of reserves to bolster its dollar peg in the event of mass withdrawals.
