Due to concerns about an economic downturn, the leading cryptocurrency, Bitcoin, is continuing its downward trend. According to the cryptocurrency exchange Coinbase on the 4th, at 3:31 PM Eastern Time (1:31 PM Pacific Time), the price of one Bitcoin was trading at $59,286, down 2.07% from 24 hours ago.
At one point on this day, Bitcoin plummeted to $57,100, threatening the $57,000 mark. Bitcoin has fallen by about 15% over the past six days since touching the $70,000 mark on the 29th of last month, returning to the level before the ‘Trump effect’.
Bitcoin had been trading below the $60,000 mark but has been rising sharply since the 13th of last month. After former President Donald Trump, who pledged to become a “pro-Bitcoin president” who actively fosters the virtual currency industry, was ‘shot’, expectations for his victory in the November presidential election have grown, and Bitcoin has also begun to rise, reaching the $70,000 mark.
Meanwhile, at the same time on the same day, the price of Ethereum, the second largest market cap, plummeted by 5.35% to $2,756. This is the lowest level since February. Following Bitcoin, Ethereum began trading in physical exchange-traded funds (ETFs) in the US on the 23rd of last month, but amid the virtual currency slump, the decline has been greater than that of Bitcoin.
The weakness of cryptocurrencies is interpreted because of the weakening investment sentiment toward risky assets amid growing concerns about an economic downturn due to worsening economic indicators, such as the US unemployment rate hitting its highest level in about three years in July.
Other reasons for the decline include heightened geopolitical instability in the Middle East and increased supply due to the redemption of Bitcoin by Mt. Gox, a Japanese cryptocurrency exchange that went bankrupt 10 years ago. CoinDesk, a specialized coin media outlet, reported that “some investors are warning that Bitcoin could fall to the $55,000 level due to geopolitical tensions in the Middle East and the weakening sentiment toward risky assets such as technology stocks.”