Bitcoin dipped Wednesday after negative news from bank bosses caused investors to shift risk assets.
The largest cryptocurrency by market cap was trading for $16,813 at the time of writing, according to CoinGecko—a 1.2% 24-hour drop. Earlier in the day, it sharply dropped from $17,046 to $16,750 in just two hours—a level not experienced since the end of November.
The rest of the crypto market was mostly trading at a loss after recession forecasts and job cut announcements from top bank chiefs led Wall Street traders to sell stocks: the Nasdaq 100 down 2% and the S&P 500 was on set for its fourth losing day in a row.
Digital assets have largely been correlated with U.S. equities this year. When the Federal Reserve has raised interest rates to get historically high inflation under control, investors have sold so-called risk assets—which include tech stocks, Bitcoin and other digital assets—and retreated to the perceived safety of the U.S. dollar.
And when the Fed has shown signs of slowing down its aggressive monetary policy, the price of equities has jumped up—taking the crypto market (mostly) with it.
But other factors have weighed hard on assets like Bitcoin and Ethereum, too: In May, crypto project Terra crashed, leading to a brutal sell-off. And at the start of last month, FTX, one of the biggest digital asset exchanges went bust, ultimately scaring investors away from an already volatile market. And it isn't just Bitcoin taking a hit.
Ethereum is also down today by over 2%, trading hands for $1,229. The second largest digital asset also experienced a sharp sell off earlier today. It's now down 74% from its all-time high of $4,878.
And out of the biggest cryptocurrencies by market cap, Dogecoin has been hit the hardest today: the original “meme coin” and eighth largest digital asset was priced at $0.095 at the time of writing—a 4.2% 24-hour dip.
The cryptocurrency had been an outlier at the end of November and the start of this month, popping up in value, while the rest of the market was sleepy, following speculation that Elon Musk, who frequently tweets about the meme coin, might include it in his Twitter plans.
But it is now down 6.6% in the past seven days.