Bitcoin tumbles more than 50% below its all-time high as crypto plunges again
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The world's most valuable cryptocurrency was down 5% Monday after plunging again over the weekend. Bitcoin prices have now plummeted nearly 15% in the past week. At a price of just below $33,000, bitcoin is more than 50% below its record high of near $69,000 from late last year and at its lowest point of 2022.Other cryptocurrencies, sometimes referred to as altcoins, have been hit hard too. Ethereum, binance, solana and cardano are all down about 15% in the past week, while Elon Musk's beloved dogecoin has tumbled 10%.Cryptocurrencies are proving to be just as risky as stocks and susceptible to the same concerns that are dragging down the Dow, S&P 500 and Nasdaq. "Volatile trading in digital assets has not been that unusual in previous years," said Michael Kamerman, CEO of trading platform Skilling. "Cryptocurrencies are increasingly moving in sync with tech stocks with investors treating both as risk assets and often retreating to safer corners of the market during bouts of market volatility."Read MoreSome 401(k)s will soon let you invest in cryptoKamerman said he is still bullish on bitcoin for the long term. More hedge funds and other big institutions are starting to invest in crypto, and some global central banks are beginning to embrace it too. But he added that "bitcoin is not immune to the global inflation risk spreading across most other asset classes. Therefore we should expect to see the downward trend continue."Bitcoin hit by the same problems dragging down stocksInflation fears, worries about big interest rate hikes from the Federal Reserve and jitters about a possible economic slowdown have rattled Wall Street and sent bond yields skyrocketing. The 10-year Treasury bond yield is now hovering just above 3.1%, having more than doubled this year. Long-term bond yields are now at their highest level since November 2018. The surge in yields has also helped lift the value of the dollar, which tends tor rise in tandem with interest rates. The US Dollar Index is now trading near its highest level in twenty years. That's bad news for bitcoin too, as many crypto backers point to dollar weakness as a bullish sign for digital currencies.As rates (and the dollar) continue to climb, some crypto skeptics think the selling in bitcoin has only just begun. The Federal Reserve is starting to pull back on monthly bond purchases and other stimulus which could be bad news for all sorts of speculative assets."The dramatic reversal of Fed liquidity ... will collapse the pandemic era bubble in crypto currencies, money losing tech companies and meme stocks," said Jay Hatfield, chief investment officer of Infrastructure Capital Management and manager of the InfraCap Equity Income ETF.Welcome to the crypto Super BowlHatfield said he thinks bitcoin could plunge as low as $20,000 by the end of the year.The crypto collapse is also hurting several stocks with exposure to the industry. Broker Coinbase fell nearly 10% Monday and is down more than 60% this year. Robinhood, which also lets people buy and sell some cryptocurrencies, has fallen 45% in 2022. And shares of several cryptocurrencies miners, the companies that run servers which solve the complex mathematical puzzles needed to generate new bitcoin and other cryptos, have tanked too. Hive Blockchain (HVBTF), Marathon Digital Holdings (MARA) and Riot Blockchain (RIOT) are all down between 50% and 60% this year.The massive pullback in these and other momentum tech stocks is yet another sign of the rapid shift in the market's mood this year. The CNN Business Fear & Greed Index, which measures seven indicators of market sentiment, is in Extreme Fear territory. Investors may continue to shun volatile cryptos in favor of safe havens, such as dividend-paying blue chip stocks.Traders are "more reluctant to adopt the additional risk associated with the crypto sphere," said Tammy Da Costa, an analyst at DailyFX, in a report. She added that "the future of individual coins or tokens remains dubious" and that "interest rate hikes are likely to jeopardize the short-term potential for profits" in bitcoin, ethereum and other established cryptos.Click Here To Get Funded!