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Bitcoin has plunged below $20,000 for the first time since 2020, as tightening monetary policy across the world prompts a flight from riskier assets.
The world's largest cryptocurrency fell more than 9pc on Saturday morning, marking 12 straight days of declines. This means Bitcoin prices are now more than 70pc lower than where they were in November last year.
Other crypto tokens have similarly collapsed in price, with trillions having been wiped from the value of digital coins since they hit a high last year.
Ethereum, the second largest cryptocurrency, recorded a 24-hour fall of 9.1pc, while Binance Coin was down 8.2pc over the same period and Dogecoin down by 7.5pc, according to CoinDesk.
The cryptocurrency rout comes against a backdrop of higher interest rates, as central banks wrestle to keep inflation under control. Earlier this week, the Bank of England raised interest rates from 1pc to 1.25pc. Inflation is running at a 40-year-high of 9pc and could hit 11pc later this year.
Alkesh Shah, head of crypto and digital assets strategy at Bank of America Corp, told clients yesterday that in this climate investors were shifting focus to projects with "clear road maps to cash flow and profitability versus purely revenue growth".
“Investors are continuing to position defensively following last year’s liquidity-driven digital asset bull market."
Edward Moya, senior market analyst at Oanda, added the recent news flow "has been terrible for cryptos". "Surging recession fears are crippling appetite for risky assets and that has crypto traders remaining cautious about buying Bitcoin at these lows."
The slump in prices is rippling across the crypto industry, with one of the world's largest companies in the sector Coinbase this week announcing plans to cut almost one in five roles, equal to around 1,100 jobs.
Brian Armstrong, the chief executive of the company, warned over what an economic downturn could mean for the industry. “We appear to be entering a recession after a 10-plus year economic boom. A recession could lead to another crypto winter, and could last for an extended period," he wrote to staff.
Coinbase lets people buy and sell Bitcoin and other cryptocurrencies. Its shares have fallen 85pc since its flotation in New York in April last year, when it landed a $86bn (£70bn) valuation.