The Price of Bitcoin Continues to fall low to under $30,000
Since November of2021, Bitcoin has recorded more than a 55% decrease from its all-time high of $69,000 in the previous year. As of the writing of this article, Bitcoin's price has dropped more than 11% in the last 24 hours, falling below $30,000 for the first time since July 2021.
Some stablecoins are seeing price declines, as Terra USD's 1:1 peg to the US dollar has been lost. Others like Cardano, Solana, XRP, BNB, and Ethereum were among the top ten coins with double-digit percentage declines of roughly 10%.
Guillermo Jimenez, U.S. Managing Editor, explains the price volatility of Bitcoin, how massive whales with extensive holdings have the potential to impact the market, and why Bitcoin adoption is expected to become less volatile over time in Decrypt's Learn section.
The drop is likely due to concerns about the Federal Reserve's willingness to keep inflation under control at its highest level since the early 1980s. Last week, the Federal Reserve raised interest rates by 50 basis points while simultaneously promising to shrink its asset holdings; rather than buying bonds to support the economy, it will sell them to combat inflation.
While the news initially sparked an upward bounce in equities and cryptocurrency prices due to pre-announcement expectations that monetary tightening would be even more forceful, markets have been dropping since Friday.
Under challenging circumstances, harsh measures are required. And today, the Luna Foundation Guard (LFG), a non-profit dedicated to all things Terra (LUNA), elected to grant $1.5 billion in cryptocurrency to safeguard the coin. This move by Luna to empty $750 million in Bitcoin reserves to shore up Terra's LUNA stablecoin is adding to the cryptocurrency market's woes.
With one of the largest Bitcoin holding wallets dumping so much BTC on the open market, the cryptocurrency price fell. In just 24 hours, the cost of LUNA fell by over 31%.