Another drop in bitcoin, this time a 4% decline

Bitcoin fell to a six month low on Saturday. This was in addition to the steep fall that occurred in the previous session. The cryptocurrency market experienced a strong shift by investors away from speculative assets.

In the European morning, the price of the largest digital token in terms of market value dropped by 4.3 percent to $35,127. This is the lowest level since July 2021. Bitcoin has lost nearly a quarter this year. The decline was also seen in other cryptos and stocks as well. Investors have poured money into tech companies in anticipation that the US Federal Reserve would tighten its loose pandemic monetary policy in order to fight inflation. The global stock market saw its largest declines in over a year, with intense falls for the fastest-growing companies that fueled the rally from the depths the coronavirus crises. Investors now predict that the Fed will raise interest rates by three to four times this fiscal year. This has pushed bond yields up. Analysts say that higher yields on low-risk assets such as US government bonds make speculative investments like cryptocurrency less attractive.

Andrew Sullivan, Outset Global’s managing director in Hong Kong, stated that Asia was experiencing “huge volumes” as investors shift to cash.

Technology shares in the region also fell. A day after the Russian central banking announced draft proposals to ban cryptocurrency trading and mining, the sharp decline in digital assets came also on Friday. The regulations proposed would block cryptocurrency investment by banks, and prohibit any exchange of cryptocurrency for traditional currency in Russia, which is one of the largest centers for crypto mining.

In its 36-page report, the central bank stated that cryptocurrency’s rapidly rising value was mainly due to speculative demand for future economic growth, creating bubbles. They also said they have “also had aspects of financial pyramids” because of the fact that their price growth is largely supported in part by new entrants to market. Initial impact was minimal on bitcoin, which rose to 3.7% against the dollar on Thursday. However, the cryptocurrency fell more than 10% by Friday afternoon in Asia from Thursday’s high and had fallen to its lowest level since August. “The Russian regulators have been frustrated for many years and none have been heeded,” stated Vince Turcotte (Asia-Pacific sales director at Eventus Systems.

While the Russian proposal was somewhat harsher, it was just one of a series of announcements made by regulators around the world about cryptocurrency. They are primarily concerned with protecting the interests and retail investors. Turcotte compared the Russian situation to China’s before Beijing started a more severe crackdown on the sector. He said, “Nobody listened until they actually brought down the hammer.” China declared last year that crypto activities were illegal.