The price of Bitcoin fell by more than 11% in 24 hours to dip below the $30,000 mark for the first time since July 2021.
It's more than 55% lower than its all-time high of $69,000, set last November.
Other top-10 coins also suffered double-digit-percentage drops, led by Cardano (20%), Solana (16%), XRP (13%), BNB (16%), and Ethereum (10%). All told, the cryptocurrency market dropped 13% from the previous day. The $1.37 trillion market cap is its lowest this year.
Even some stablecoins are faced with declining prices, as Terra USD lost its 1:1 peg to the U.S. dollar.
Bitcoin and cryptocurrency markets have become increasingly correlated to stock prices over the past year as institutions jump aboard. Thus, Wall Street is also having a rough day as tech stocks continue to go on sale. The Nasdaq index dropped by 4.2%.
The decline can likely be attributed to nervousness over the Federal Reserve's determination to quell inflation, which is at its highest rate since the early 1980s. The Fed last week announced an interest rate increase of 50 basis points while also pledging to reduce its holdings; instead of buying bonds to stimulate the economy, it will be selling them to ward off inflation.
While the news initially caused an upward swing in equities and crypto prices thanks to pre-announcement expectations that the monetary tightening would be even more aggressive, the news settled in by Friday and markets have been declining ever since.
Adding to the cryptocurrency market's woes, in particular, is Luna Foundation Guard's decision to empty $750 million Bitcoin reserves to shore up Terra's LUNA stablecoin. With one of the largest Bitcoin-holding wallets splashing so much BTC on the open market, it put downward pressure on the price. LUNA itself dropped over 31% in the span of 24 hours.