Bitcoin has rough week, plunging 11%

Bitcoin had one of its worst weeks of 2023, with more than $1 billion of the cryptocurrency liquidated in the past 24 hours alone.

Bitcoin is now punching in at about $26,000, nearing lows last seen during a June dip. That represents an 11% decline since the start of the week and nearly 8% losses in just the past day. Other cryptocurrencies were also flagging this week, with nearly all of the 100 largest coins in the red.

RENTS ROSE AGAIN IN JULY, PUTTING UPWARD PRESSURE ON INFLATION

Ethereum, the second-largest cryptocurrency, was down about 5.5% on Friday to about $1,660, and Ripple plunged nearly 20% since the start of the week, falling to about 51 cents per coin.

It appears as though the pullbacks in the crypto market are emanating from broader macroeconomic factors, plus a report about SpaceX. Rising interest rates have rattled the market as the Federal Reserve continues to tighten monetary policy, at least for the time being.

“U.S. interest rates are rising to multiyear highs. The 10-year yield has pushed to 15-year highs. This is bearish risk assets in general,” Decentral Park Capital trader Lewis Harland told CoinDesk. “If this sell-off in bonds continues we could see continued negative price action in risk assets into the weekend.”

Additionally, there have been growing concerns about China’s economic situation and how its slowing growth could ripple out into the broader globalized economy.

China is staring down several economic problems and is working to obfuscate just how dire the situation might be. This week, it suddenly slashed rates in a clear signal that Beijing is worried about the country’s economic outlook. The People’s Bank of China lowered the rate on its one-year loans to 2.5% on Tuesday, the second cut since June.

Also this week, China announced it would suspend publication of the youth unemployment rate. The official excuse was that it needed to be better calculated, although it is noteworthy that youth unemployment has risen to new highs in recent months.

The country is also facing a property crisis, with massive property developer China Evergrande filing for bankruptcy protection on Thursday.

Because of how interwoven the U.S. economy is with China through trade, the fear is that if Beijing’s economic outlook keeps darkening, it could cause economic pain stateside.

The Wall Street Journal, citing documents, reported this week that SpaceX wrote down the value of the bitcoin it owns by more than $370 million last year and in 2021 and has offloaded the cryptocurrency.

Also, digital assets have become increasingly tethered to traditional stocks, which have been falling this week. In downturns, investors typically flee risky investments in favor of safer and more stable stores of value. Bitcoin and other cryptocurrencies are still a new asset class.

In fact, the stock market is on track to post its worst week since March.

The Dow Jones Industrial Average shed more than 750 since the start of the week, or about 2%. The tech-heavy Nasdaq is off by about 2.5%, and the S&P 500 fell by about 2% over the past five days.

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER

Despite this week’s decline, bitcoin is in the black for the year and has delivered better year-to-date returns than traditional assets.

After an abysmal 2022, which was marked with more regulatory crackdowns and the collapse of FTX, bitcoin is up 56% since the start of January. Ethereum rose 38% since the start of the year, and Ripple has popped by 48%.