Bitcoin falls one other eight% as cryptocurrencies prolong sharp losses

Alec Monopoly paints a bitcoin on a mural at the North American Bitcoin Conference held at the James L Knight Center on January 18, 2022 in Miami, Florida.

Joe Raedle | Getty Images

Cryptocurrencies continued their dramatic decline on Saturday, with Bitcoin shedding almost half of its value since hitting its November high.

Bitcoin, the world’s most valuable cryptocurrency by market value, plunged about 8% on Saturday to trade just above $35,000. The coin hit a record high of $69,000 in November.

Meanwhile, Ether, the second largest cryptocurrency by market cap, is down nearly 10% to trade around $2,400.

The losses followed a slump in the stock market on Thursday. Cryptocurrencies and traditional stocks have fallen together this month, with investors worried about how expected Federal Reserve rate hikes will affect the market.

A common investment argument for Bitcoin is that it serves as a hedge against rising inflation as a result of government stimulus, but analysts say the risk is that a more restrictive Fed could take the wind out of the crypto market’s sails.

There is also concern that US regulators will continue to crack down on digital currencies.

The Central Bank of Russia proposed earlier this week to ban the use and mining of cryptocurrencies. Officials argued that this posed a threat to financial stability, the well-being of citizens and the sovereignty of monetary policy. US authorities have also put pressure on certain aspects of the market.

—CNBC’s Weizhen Tan contributed to this report.

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