Following a dramatic decline in stock prices on Friday as investors withdrew from risky investments on fresh worries that the Federal Reserve’s efforts to combat inflation could push the economy into recession, Bitcoin fell below $20,000 on Saturday, trading at its lowest levels in almost a month.
Bitcoin dropped to a low of $19,886 on Saturday before marginally recovering. As of the late afternoon, it was trading at $20,055, down 2.93% from the previous day and down 70.1% from a record high of $67,037 in November.
On Friday, the Dow Jones Industrial Average plunged more than 1,000 points to 32,283 after Federal Reserve Chair Jerome Powell expressed concern that the FED may need to move “forcefully” to address the nation’s skyrocketing inflation.
Ether dropped 4.99% to $1,481 and Dogecoin dropped 3.53% to 6 cents on Saturday, among other cryptocurrencies.
Meanwhile, on Friday, the stock of top cryptocurrency broker Coinbase dropped 6.49% to settle at $66.74, a significant decline from $368.90 in November, as a result of fewer crypto trading volumes in a bearish market.
Cryptocurrency prices rose dramatically during the Covid-19 outbreak due to low-interest rates and government stimulus, but they have since sharply declined. On whether a recession might occur, economists have differing opinions.
According to Goldman Sachs analysts, there is a one in three chance that the economy will experience a recession in the coming year. Nomura economists believe one will begin this year, while Bank of America economists have warned that a “mild recession” might occur by year’s end.
To read our blog on “Diamond hands have reached an all-time high in Bitcoin’s price,” click here.
