Bitcoin prices have plummeted amid a global sell-off in stocks.
Luke McGregor | Bloomberg | Getty Images
Bitcoin fell sharply along with other assets on Friday, hitting a six-week low and officially entering bear market territory.
The world’s largest cryptocurrency fell 8% in the last 24 hours to $ 54,177, according to Coin Metrics, its lowest level since early October. Bitcoin is down 20% from an all-time high of nearly $ 69,000 earlier this month.
Bear markets are usually characterized by declines of 20% or more from recent highs.
Other cryptocurrencies also fell on Friday. Ether, the second largest cryptocurrency, fell nearly 11% to $ 4,027, while XRP fell 11% to around 94 cents.
Digital currencies are falling along with other risky assets amid panic over a highly mutated new variant of the coronavirus, first spotted in South Africa.
The World Health Organization on Thursday held a briefing on the new variant, known as B.1.1.529, which is believed to contain more than 30 mutations. In response, the UK and other countries have temporarily suspended flights from six African countries.
Global stock markets fell on Friday: European stock indices showed their worst session in more than a year, and futures for US stocks fell sharply.
Investors are moving away from riskier assets in favor of bond safety, with US Treasury yields plummeting. The yield on bonds changes inversely with prices.
Bitcoin is often described by its supporters as “digital gold”, referring to the status of the yellow metal as a so-called safe asset.
Crypto investors say the virtual currency offers a store of value as well as inflation protection.
It is worth noting that bitcoin is an unstable asset and is known to fluctuate in price by more than 10% in a single day.