Financial

Cryptos: Bitcoin plunges 26%, its sharpest selloff in 7 years

Cryptocurrencies were not immune to the coronavirus-related selloff on Wall Street on Thursday, as the price of bitcoin plummeted 26%, its worst daily selloff in seven years.

Bitcoin
BTCUSD,
+3.39%

was recently trading below $5,700, as the world’s largest digital currency by market cap has lost nearly a third of its value in the past five days, according to Coindesk data.

Despite a widely held belief that crypto investments are a good hedge against stock market investments, it appears digital currencies are just as vulnerable to the current uncertainty surrounding the coronavirus pandemic and the resulting economic damage it will cause. On Thursday, the S&P 500
SPX,
-4.33%

and Nasdaq Composite
COMP,
-3.79%

joined the Dow Jones Industrial Average
DJIA,
-4.54%

in bear-market territory, commonly defined as a decline of at least 20% from a recent peak.

On Feb. 9, bitcoin passed the $10,000 mark for the first time since September, leading some to speculate that another run to huge gains could be in store. That has not happened. Thursday’s losses wiped out bitcoin’s gains for the year to date, leaving it trading at its lowest level since early May 2019. Bitcoin is now down 17% year to date, though still up 50% over the past 12 months.

Overall, the cryptocurrency industry lost $62 billion in market cap, finishing Thursday trading with a collective value of $159.6 billion, compared to $221.6 billion at the start of the day, according to data from CoinMarketCap.com. Losses over the past month are even worse, tumbling from a total of $303.6 billion on Feb. 12 to nearly half that today.

Other cryptocurrencies were battered as well, with ethereum
ETHUSD,
+5.05%

plunging a daily record 33% on Thursday to $131, its lowest price since early January. Ethereum is still up 3% this year, but down 2.5% over the past 12 months. Ripple
XRPUSD,
+1.98%

, bitcoin cash
BCHUSD,
+4.13%

, litecoin
LTCUSD,
+4.07%

and Monero
XMRUSD,
+4.81%

also saw sharp selloffs, and all are now down this year by double digits.

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