Bitcoin has given up its year-to-date gains just over a month after reaching a new record high. The currency has fallen by around thirty percent.
The world’s largest and oldest cryptocurrency reached a new record high of over $126,000 in early October. Since then, the price has fallen below the $94,000 level reached at the end of last year, and the annual gain of approximately 30 percent has completely evaporated.
Bitcoin’s price has fallen along with other riskier investments. For example, the recent punishment of high-growth technology stocks has led to a decline in overall risk appetite. Investors are questioning whether the high stock prices are justified by concerns about massive spending on artificial intelligence (AI). Hopes for a rate cut by the Federal Reserve in December have also waned.
“The overall market is risk-averse,” said Matthew Hougan, chief investment officer at asset manager Bitwise Asset Management. Bitcoin’s total market value has fallen by about $600 billion from last month’s peak. The world’s largest cryptocurrency, which accounts for nearly 60 percent of the roughly $3.2 trillion crypto market cap, has roiled investors throughout the year.
On January 20, the day US President Donald Trump was inaugurated, Bitcoin was worth over $109,000 amid hopes for his administration’s crypto-friendly policies. However, concerns about Trump’s global trade war caused the currency’s value to plummet to $74,400 in April.
