Bitcoin is trading at less than half its all time high reached in November.
DreamstimeBitcoin and other cryptocurrencies are, in theory, supposed to trade independently of mainstream financial markets. In practice, a tight correlation with stocks—and especially tech stocks—has weighed on digital assets. But not as much as it might.
The price of Bitcoin was higher over the past 24 hours and holding well above $29,500. The relative sturdiness in the largest crypto comes despite a brutal day for U.S. stocks on Wednesday, with a selloff that was continuing into Thursday.
The Dow Jones Industrial Average lost 3.6% and the S&P 500 plunged 4% on Wednesday as the indexes notched their ugliest performances since June 2020. The Nasdaq Composite’s 4.7% decline was only the worst since two weeks ago, underscoring the pressure tech stock—and correlated cryptos—have faced. The pain continued in early Thursday trading, with the Dow quickly shedding more than 400 points.
“Bitcoin remains a risky asset and vulnerable to further pain if the de-risking continues,” Edward Moya, an analyst at broker Oanda, wrote late Wednesday. Yet cryptos seem relatively sturdy.
While Bitcoin continues to trade around its lowest levels since late 2020, and is changing hands at less than half the record high near $69,000 it reached in November 2021, it hasn’t fallen much further since last week’s cryptocurrency crash.
Bitcoin dropped near $26,000 during the lows of last week, but has stayed around $29,000 since Monday. The S&P 500 has lost 3% over the same period.
Other cryptos were similarly relatively unmoved. Ether dropped 1% to below $2,000. The token underpinning the Ethereum blockchain network was holding above its bottom below $1,800 hit last week, but is still down by one-third from two weeks ago.
Smaller cryptos, or altcoins, showed much of the same. Cardano and Solana both dipped around 1%, though Avalanche plunged 7%.
So-called memecoins, launched more as jokes than as serious efforts to create usable currencies, were slightly lower. Dogecoin and Shiba Inu were both around 2% into the red.
TerraUSD, the stablecoin designed to be pegged to the U.S. dollar that collapsed less than two weeks ago, fueling the crypto selloff, traded at 8 cents. Luna, a related token that through an arbitrage market mechanism is meant to keep Terra on its peg, was changing hands at one-hundredth of a penny. It was at $80 two weeks ago, when it was one of the largest digital assets.
Write to Jack Denton at jack.dentondowjones.com
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