Published: May 11, 2022
The value of Bitcoin has dropped below $31,000, which is less than half of its peak value back in November 2021.
Investors are abandoning risky assets in exchange for safer assets like the dollar. So, the fall of the most popular cryptocurrency comes at a time when stock markets all over the world are tumbling down.
Big European, American, and Asian indexes are sliding even lower. London’s FTSE 100 closed more than 2%, while Nasdaq, which has been losing in recent weeks, lost 4.3%.
This Monday, Uber’s shares dropped more than 11% after executive Dara Khosrowshahi said investors might become hesitant about investments.
Khosrowshahi said that the market is experiencing “cosmic shifts.” And for this, he indicated that Uber plans to hire fewer people in order to cut costs. He added that this new period would be different, and the company would have to take a different approach.
When such unprecedented times come, most investors decide to sell risky assets, such as Bitcoin and other cryptocurrencies, so that they can transfer their funds into something safer.
And it’s not just Bitcoin that has taken the hit! Other cryptocurrencies like Ethereum have also faced a drop in value. It has dropped by over 20% in the last week.
Other financial institutions are trying to battle the rising prices by increasing their interest rates. The central banks in countries such as the UK, US, and Australia, have already initiated this step.
The US Federal Reserve has also raised its key lending rate by half a percent. This step has triggered many investors as this is the biggest rate hike in over 20 years.
The war in Ukraine is another factor that worries investors around the world.