‘Greed and fear’ abound as bitcoin, ethereum, other cryptos crash. Here’s what’s happening
Cryptocurrencies Bitcoin and ethereum are down by over 50% of their peak values from last year
U.S. tech stocks just had their worst month in over a decade, and the volatile cryptocurrency market has been tracking that downward trend with popular digital currencies like bitcoin and ethereum plunging by some 50% from 2021 peak valuations.
What’s happening: Bitcoin continued its steep fall into Monday after a rough weekend, according to Fortune. This marks the fifth consecutive down day for bitcoin, sending its market price to less than half of what it was at its all-time high of $69,000 in November.
Ethereum, the second-largest crypto, was also trending down and valued at about half its peak from last November when it was trading at over $4,800 per token.
Market pricing posted by CoinGecko on Monday showed nine of the top 10 cryptocurrencies were trading at seven-day losses and many are down by double-digit percentages over the past week.
The bigger, gloomier picture: The Nasdaq continued to lead the losses as investors moved away from high-flying tech stocks, shedding 3.3% in morning trading on Monday, according to The Washington Post.
April was the worst month for the index since 2008 as jitters sent investors running for cover. The trend carried over into May: Amazon, Apple, Meta and Lyft all slid 2%. Microsoft declined 3% and Tesla was down 5%.
Per The Post, cryptocurrencies, whose movements have paralleled the Nasdaq in recent months, continued to slide. After a temporary Fed-induced boost last week carried it above $40,000, Bitcoin was trading down more than 5% Monday at $32,760. Ethereum, another popular cryptocurrency, was also down more than 6% at $2,386.
“Market psychology is driven by greed and fear,” Wayne Wicker, chief investment officer at MissionSquare Retirement, told The Post in an email Monday. “The volatility in markets today is driven by uncertainty in the future rate of inflation and the actions the Fed will take in its attempt to mute upward price increases.”
What is cryptocurrency? If the world of cryptocurrencies is still seeming rather, er, cryptic, here’s a handy breakdown from Investopedia:
- A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend.
- Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers.
- A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation.