On Monday, Bitcoin hit its lowest level since January, as falling equity markets weighed on cryptocurrencies, which are now trading in line with so-called riskier assets like tech stocks.
In early trade, bitcoin fell as low as $33,266 to test the January low of $32,951. If it drops below that level, it will be at its lowest since July of last year.
The price then settled at roughly $33,500, down 1.4 percent.
“I think everything within crypto is still classed as a risk asset, and similar to what we’ve seen with the Nasdaq, most cryptocurrencies are getting pummelled,” said Matt Dibb, COO of Singapore-based crypto platform Stack Funds.
Last week, the Nasdaq (.IXIC) plummeted 1.5 percent, bringing its year-to-date loss to 22 percent, as persistent inflation forces the US Federal Reserve to raise rates despite slowing GDP. On Monday morning in Asia, Nasdaq futures were down another 0.8 percent.
Other factors in bitcoin’s weekend slide, according to Dibb, were the crypto market’s notoriously low liquidity on weekends, as well as short-lived fears that an algorithmic stablecoin dubbed Terra USD (UST) could lose its peg to the dollar.
Stablecoins are digital tokens that are linked to traditional assets, most commonly the US dollar. The crypto world is keeping an eye on UST because of its unique method of maintaining a 1:1 dollar peg, as well as its founders’ aspirations to construct a $10 billion bitcoin reserve to support the stablecoin, implying that UST volatility might potentially leak over into bitcoin markets.