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Bitcoin’s Price Climbs Above $20,000 After Sharp Crypto Selloff

The price of bitcoin fell below $18,000 Saturday before rebounding Sunday evening above $20,000, a level widely monitored by cryptocurrency ...

The price of bitcoin fell below $18,000 Saturday before rebounding Sunday evening above $20,000, a level widely monitored by cryptocurrency enthusiasts.
The price of bitcoin fell below $18,000 Saturday before rebounding Sunday evening above $20,000, a level widely monitored by cryptocurrency enthusiasts. Bitcoin rose 10% to $20,571.29 Sunday evening after falling to as low as $17,601.58 Saturday afternoon, according to CoinDesk. The digital currency lurched below $20,000 Saturday, sparking fears it could plunge further. It has lost 70% of its value from its high in November.

Concerns about the Federal Reserve’s actions to tame higher-than-expected inflation have pushed stocks and cryptocurrencies into a bear market. Big names in the industry, including Coinbase Global Inc., COIN +7.41% the biggest cryptocurrency exchange in the U.S., have recently announced job cuts.

“Bitcoin breaking the $20,000 price level was long coming, given the pessimism that we have in the market,” said AvaTrade market analyst Naeem Aslam. The fallout from the collapse of the stablecoin Terra USD in May will continue to ripple out, he said, and that is depressing sentiment. There is no specific significance to the $20,000 level, but the price slid below $19,783, a previous high water mark hit in 2017, according to Coinbase. Bitcoin bulls have long held that the cryptocurrency had in recent years entered a new stage of development and acceptance, and that it wouldn’t fall below that 2017 level.

“It will be a lot of pain for a lot of investors,” said Yuya Hasegawa, a market analyst at Japanese crypto exchange Bitbank Inc. People will lose confidence in the crypto market as a whole, but seasoned crypto investors and those who believe in its long-term prospects will see an opportunity to buy at discounted prices, he said.

Crypto has been on a wild ride lately, experiencing huge dips and volatility impacting investors and companies, and catching the eye of regulators. WSJ crypto reporter Paul Vigna joins host Zoe Thomas to answer your questions about how the market is supposed to work, how the government is responding and what the future could hold for the cryptocurrency space.

To Wayne Sharp, a retired investment adviser in Columbus, Ohio, the cratering crypto market came as no surprise. She bought about $10,000 worth of bitcoin in 2020 and has been sitting on it since then, with no plans to sell or buy more. “I’ve seen a lot of cycles. I’ve been watching this for 45 years,” she said. “Humans just make the same mistakes over and over again.”

Ether, another major cryptocurrency, surged 19% to $1,141.52 after falling below $1,000 Saturday. It traded as low as $880.93, according to CoinDesk, its lowest level since January 2021.

Bitcoin’s slide from its record high of $67,802 in November has contributed to a roughly $2 trillion wipeout in the broader market. Crypto’s total market capitalization, which peaked in November at nearly $3 trillion, stood at roughly $834 billion Saturday—its lowest since January 2021, according to data provider CoinMarketCap. Bitcoin traded around the $30,000 mark for most of May before dropping sharply again in June after a fresh inflation shock and worries about rising U.S. interest rates. Investors have been unloading assets seen as risky, such as cryptocurrencies and technology stocks.

Individual investors have received margin calls, with about $349.25 million of collateral pledged by about 88,415 retail traders liquidated over the past 24 hours, according to data provider CoinGlass. That compares with $1 billion earlier this week.

More previously highflying crypto firms have been feeling the pain in what has been dubbed a “crypto winter.” Cryptocurrency lender Babel Finance told customers Friday that it was suspending redemptions and withdrawals from all products, citing “unusual liquidity pressures.” One of the largest crypto lenders, Celsius Network LLC, hasn’t let users withdraw funds for roughly a week, citing extreme market conditions.

Cryptocurrency-focused hedge fund Three Arrows Capital Ltd. has hired legal and financial advisers to help work out a solution for its investors and lenders after suffering heavy losses from a broad market selloff in digital assets, the firm’s founders told The Wall Street Journal.


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