The price of bitcoin is tanking nearly 10% Thursday, tacking on to massive losses as bearish calls from regulators and analysts heighten after a huge surge fueled by still-booming institutional adoption.
KEY FACTS
As of 12 p.m. EST, bitcoin’s 24-hour plunge has pushed prices down to their lowest levels in more than two weeks, wiping out roughly $180 billion in market value since a record high on January 8, according to crypto data firm CoinMarketCap.
Most other top tokens are also plunging, with ether, XRP and cardano down 7%, 3.5% and 3%, respectively.
The sustained losses come as bitcoin’s rising mainstream adoption “raises correlations with cyclical assets, potentially converting cryptocurrencies from insurance to leverage,” JPMorgan analysts said in a note to clients reported by Bloomberg Thursday.
The analysts went on to say that bitcoin is the “least reliable hedge during periods of acute market stress,” an observation that stands in stark contrast to Wall Street experts saying that investors have been flocking to the world’s largest cryptocurrency as a “legitimate hedge against inflation.”
Meanwhile, President Joe Biden’s Treasury Secretary nominee, Janet Yellen, who could be overseeing crypto-critical bureaus like the Financial Crimes Enforcement Network and the Internal Revenue Service, called cryptocurrencies “a particular concern” on Tuesday, suggesting that lawmakers take action to “curtail their use,” particularly to ensure they’re not used for illicit financing.
That’s not stopping institutional players from diving further into the space: Investment giant BlackRock filed documents with the Securities and Exchange Commission on Wednesday to include cash-settled bitcoin futures as eligible investments for two of its funds.
CRUCIAL QUOTE
“Bitcoin is showing some vulnerability at the end of such a strong month: It was seeing some pressure at $34,000 Wednesday and has since buckled, making a run at $30,000 highly likely,” noted Oanda Senior Market Analyst Craig Erlam Thursday morning. “This level looks very vulnerable and a break below it is bad news in the near term for bitcoin and cryptocurrencies in general," he added, before saying he’d be less surprised if prices plunge to $20,000 before they break new highs.
BIG NUMBER
$926 billion. That’s the current market value of all cryptocurrencies, according to CoinMarketCap. That’s down nearly $200 billion, following a record $1.1 trillion earlier this month, with nearly all the losses fueled by bitcoin.
WHAT TO WATCH FOR
Yellen’s not the only Biden nominee with a critical eye on crypto. Gary Gensler, the president’s nominee to head up the SEC, is a former banker who in 2018 said that cryptocurrencies including ether and XRP are akin to securities. In December, the SEC charged Ripple Labs (the firm behind XRP, the world’s third-largest token at the time) and two of its executives with conducting an unauthorized securities offering. In its complaint, the SEC alleged XRP is a security and therefore subject to the agency’s regulatory purview. XRP prices are down more than 60% since then. Meanwhile, an SEC director declared in 2018 that ether was not a security, but he stopped short of making that declaration permanent.
This article originally appeared on Forbes.
