The value of bitcoin dropped below $20,000 on Saturday, its lowest since late 2020, signaling a deepening spiral in the cryptocurrency selloff trend.
Bitcoin, the most popular cryptocurrency, fell below the psychologically important threshold, dropping by as much as 9% to less than $19,000 and hovering around that mark, according to the cryptocurrency news site CoinDesk.
The last time bitcoin was at that level was in November 2020, when it was on its way up to its all-time high of nearly $69,000, according to CoinDesk. Many in the industry had believed it would not fall under $20,000.
Bitcoin has now lost more than 70% of its value since reaching that peak.
Ethereum, another widely followed cryptocurrency that's been sliding in recent weeks, took a similar tumble on Saturday.
It's the latest sign of turmoil in the cryptocurrency industry amid wider turbulence in financial markets. Investors are selling off riskier assets because central banks are raising interest rates to combat quickening inflation.
The overall market value of cryptocurrency assets has fallen from $3 trillion to below $1 trillion, according to coinmarketcap.com, a company that tracks crypto prices.
A spate of crypto meltdowns has erased tens of billions of dollars of value from the currencies and sparked urgent calls to regulate the freewheeling industry. Last week, bipartisan legislation was introduced in the U.S. Senate to regulate the digital assets. The crypto industry has also upped its lobbying efforts - flooding $20 million into congressional races this year for the first time, according to records and interviews.
Cesare Fracassi, a finance professor at the University of Texas at Austin who leads the school’s Blockchain Initiative, believes Bitcoin's fall under the psychological threshold isn't a big deal. Instead, he said the focus should be on recent news from lending platforms.
Cryptocurrency lending platform Celsius Network said this month that it was pausing all withdrawals and transfers, with no sign of when it would give its 1.7 million customers access to their funds.
"There is a lot of turbulence in the market," Fracassi said. "And the reason why prices are going down is because there is a lot of concern the sector is overleveraged."
The cryptocurrency exchange platform Coinbase announced Tuesday that it laid off about 18% of its workforce, with the company's CEO and cofounder Brian Armstrong placing some of the blame on a coming "crypto winter."
Stablecoin Terra imploded last month, losing tens of billions of dollars in value in a matter of hours.
Crypto had permeated much of popular culture before its recent tumble, with many Super Bowl ads touting the digital assets and celebrities and YouTube personalities routinely promoting it on social media.