The world's most popular cryptocurrency, bitcoin, continued trading in the red on Wednesday, after a day which saw it briefly drop below $40,000 for the first time since August. Other leading cryptos are also trading lower.
Bitcoin later recouped some of the losses, but it was still down 2.2% to $42,352 as of 9:30am GMT, according to the CoinDesk tracker.
Ether, the second-largest crypto, was down 4.5% to $2,929. Litecoin dropped 3.93% to $154.43, while dogecoin lost 0.6% to $0.21. Other digital tokens like XRP, Solana, Uniswap, Stellar, and Polkadot also lost value over the past 24 hours.
Bitcoin started its steep downfall on Monday, losing as much as 10% during the day’s trading and dropping below the $44,000 level. Experts attribute this decline to the broader sell-off in the global equity markets due to fears over mounting problems at Chinese property giant Evergrande. However, some say that the embattled firm is not the only driver of the crypto decline.
“Truth be told, the market rout we’re seeing is reflecting a wider set of risks than just Chinese property, and comes after increasing questions have been asked about whether current valuations could still be justified, with talk of a potential correction picking up,” Jim Reid, a strategist at Deutsche Bank, wrote in a note on Tuesday, as cited by Coindesk. According to the bank’s recent survey, 68% of investors expect at least a 5% correction in equity markets by 2022.
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