The global selloff in cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) has accelerated to start December, with prices down as much as 10% in the past 24 hours.
Bitcoin, the largest cryptocurrency by market capitalization, was down about 5% early on Dec. 1 and trading at $86,200 U.S. Ethereum was down 6% and changing hands at $2,840 U.S.
Smaller cryptocurrencies were faring worse, with Solana (SOL) down nearly 8% and Dogecoin (DOGE) down as much as 10% in early trading.
A statement by the People’s Bank of China over the weekend that warned of illegal activities related to digital assets sent prices spiraling lower.
Cryptocurrencies trade around the clock: 24 hours a day, seven days a week.
Analysts say the selloff in crypto appears to be worsening and continues the steady decline seen in November as a risk-off sentiment grips financial markets worldwide.
Bitcoin had staged a tentative recovery in the final days of November after falling more than 30% during the month.
After briefly rising above $90,000 U.S., BTC has again fallen back towards $85,000 U.S., its lowest level since the tariff tantrum in April of this year.
Bitcoin, Ethereum, and other crypto have been hit hard by forced liquidations that have occurred since Oct. 10 when the price of digital assets fell sharply.
There is sizable leverage across crypto exchanges, estimated at $785 billion U.S. globally. That massive debt is forcing many investors to sell their holdings as prices drop.
Bitcoin and other cryptocurrencies are also trading in tandem with technology stocks, particularly those associated with the artificial intelligence (A.I.) trade.
Macroeconomic worries and uncertainty over a December interest rate cut in the U.S. also have investors on edge and selling riskier assets such as cryptocurrencies.
BTC is now down 8% on the year.
