The largest cryptocurrency by market capitalization plummets below $41,000 after rising earlier in the day.
After jumping over $43,000 for a short time, bitcoin plummeted below where it started 24 hours ago. Ether and the largest altcoins by market capitalization also rose promisingly before falling back.
At the time of publication, bitcoin was trading under $41,000, ether had dropped below $3,100, and 19 of the 20 largest major altcoins by market cap were in the red.
The moves downward reflected ongoing pessimism about the economy and rising interest rates, and mirrored bearish sentiment about once, high-flying tech stocks. After a late sell-off of stocks, the tech-heavy Nasdaq Composite index dropped 1.1% in U.S. trading hours. The S&P 500 fell similarly.
Joe DiPasquale, the CEO of the crypto fund BitBull Capital, said investors were initially upbeat about a study by the U.S. Federal Reserve on a digital dollar. “Any news that comes from such an official sources lends crypto credibility, and that credibility leads to increased demand,” DiPasquale said.
He attributed crypto markets’ recent down trend “to lower demand and some seasonability. “January is historically a soft month,” he said. “So I’m hopeful as we lead into the next few weeks that there will be increased activity and demand.”