Bitcoin Plummets Below $20,000 for First Time Since Late 2020

Bitcoin Plummets Below $20,000 for First Time Since Late 2020

The collapse of two large cryptocurrency projects has hastened its decline in recent weeks, raising concerns about the overall viability of the bitcoin sector.

On Saturday, the price of Bitcoin dipped below $20,000 for the first time since December 2020, amidst a broader market sell-off fueled by rising interest rates, inflation, and economic concern fueled by the Ukraine conflict.

Bitcoin, the most popular cryptocurrency, has plummeted in value over the last few months, falling below $19,000 at one point on Saturday.

The collapse of two major cryptocurrency projects, Terra-Luna and Celsius, has hastened its decline in recent weeks,

raising worries about the overall viability of the cryptocurrency sector. Since its high in November, Bitcoin has lost about $900 billion in value.

The price of a single Bitcoin increased twelvefold from March 2020 to November 2021, reaching $64,000. In November 2020, it surpassed the previous high of $19,738.

The sharp drops demonstrate how intertwined and intricate the crypto markets have become in recent years, according to R.A. Farrokhnia, a financial technology expert at Columbia Business School.

"This produces a cascade effect on top of the contagion effect," he said, as investors flee to less risky assets.

Investing in Bitcoin and other cryptocurrencies increased during the epidemic, along with other high-risk wagers on assets such as "meme stocks," collectibles such as shoes and trading cards,

and nonfungible tokens, or NFTs, which are digital art and culture. Free-flowing stimulus payments, low interest rates on other assets, a social media frenzy,