The value of bitcoin is moving towards the low of earlier this year. This week, the major digital currency lost more than 6 percent of its value, trading at $18,620 each.
This decrease is partly responsible for the total market value of the crypto sector falling below 1 trillion dollars. Other currencies besides bitcoin also fell by about 6 percent this week.
Rising interest rates, considered the real cost of borrowing, are putting enormous pressure on a range of risky investments, including cryptocurrencies. With bitcoin’s decline this week, the currency is moving towards the low of $17,600 that was tapped earlier this year.
“The macro story is very hard to let go of. ” Kevin Loo of asset manager IDEG Asset Management told Bloomberg that it will set risky investments in motion. “Bitcoin is below $20,000. We have been here before. We can likely go even a little lower.” However, he did point out that bitcoin had already been in a trough before but was able to move out again. “If you measure from trough to trough, the trend is for us to go up again in the longer term.”
The broad crypto market lost about 60 percent of its value this year. Bitcoin fell hard from its peak in November last year, when it was still worth $69,000.