Bitcoin fell sharply to $38,500 at around 7 a.m. (Dutch time) on crypto platform Coindesk, a loss of more than 7%. In November, the digital currency touched an all-time high of just below $69,000.
Bitcoin is coming under increasing pressure due to the expectation that the US central bank will raise interest rates faster than expected to curb high inflation. When interest rates rise, investors usually move out of riskier investments such as cryptocurrencies.
Ban
The European Securities and Markets Authority (ESMA) would also like to ban the mining of bitcoins in the European Union. The stock market regulator fears that mining crypto coins poses a risk to achieving the Paris climate goals. Sweden’s financial regulator has already spoken out in favor of an EU ban on mining some cryptocurrencies, including bitcoins.
Russia’s central bank also wants to ban the use and mining of crypto coins in the country to ensure financial stability. It has been banned in China since May.
Other cryptocurrencies also fell along with bitcoin. For example, the ether fell well below $3000. The second-largest digital currency lost more than 10% to about $2,868. Crypto markets have lost about $1 trillion in value since their peak in November.