WASHINGTON DC – A plunge in cryptocurrency values and the collapse of popular tokens are stoking panic among some investors and boosting pressure on Washington to act.
Rising interest rates and recession risks have caused sharp sell-offs across financial markets, including the stock market. Many crypto investors have seen their holdings evaporate — along with major players in the burgeoning digital asset space.
The value of one bitcoin has plunged 12 percent this week alone to roughly $29,700, its lowest level since July 2021 and just half the all-time high of $64,440 set in November. Ethereum, another popular cryptocurrency, is down 24 percent this week alone and nearly 50 percent on the year as well.
“Two main factors are at play: one is that the US Federal Reserve and other central banks are raising interest rates and removing liquidity and therefore removing key props to valuations across all asset classes – including crypto,” wrote Lil Read, senior analyst at GlobalData, in a Friday analysis.
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