When Bitcoin reached $68,000. It seems like a long time ago, but it’s not possible: it was November 2021. A little over six months have passed and today bitcoin is below $24,000. The already massive drop a month ago continues to worsen. The question is, of course, why?

Yet another bump. Bitcoin is falling steadily. It has done this almost constantly over the past 12 weeks, while still struggling to see if it exceeds $40,000. Since then, the blows in the value of bitcoin and other cryptocurrencies have been unparalleled. Ethereum, which appears to be somewhat more resistant to such moves, recently broke down from the $1,200 barrier when it seemed very settled in the $3,000-4,000 range. It doesn’t help delaying the adoption of the new PoS mechanism for Ethereum.

December 2020 levels. It had been more than a year and a half since cryptocurrencies were not that low. Most were at these levels at the end of 2020, but they did so with the opposite trend: They didn’t stop growing and everything showed they were going to continue to do so. Volatility has become the norm again, and today we found a bitcoin that lost 65% of its value compared to its all-time high… and it’s one of the “least” losers.

Will it drop below 20,000? That’s a question some investors are asking right now, and as things stand, they believe bitcoin could drop below $20,000 and hit levels reached in December 2017, five years ago. It wouldn’t be unreasonable because nothing is unreasonable in this segment, and indeed, after reaching $20,000 at the time, bitcoin bottomed out for months and dropped as low as $3,000. The roller coaster doesn’t stop.

Inflation saves no one. The reality is that it is no longer possible to look at cryptocurrencies and see them so differently from other financial assets. Institutional and business interests have made bitcoin and others part of a market that is now closely aligned with traditional exchanges.

Inflation has been putting pressure on the economy for months, and this new drop can be seen in bad data from the United States, where the Consumer Price Index (CPI), the consumer price index, grew 8.6% year-on-year. and it was expected to fall.

Added to all this is the recent chaos caused by Celsius Network, the largest cryptocurrency lending company in the US. This Monday, the company announced it was freezing asset withdrawals, claiming there was an “extreme” market situation.

Technology is falling too. Measures to reduce inflation have not had particularly significant effects at the moment, and in fact the stocks of big tech companies are also falling significantly: Apple, Microsoft, Tesla, Netflix or Google are losing between 3 and 1 today.5 Even before the US markets open, it’s great for giants of this caliber. There have been declines.

“Risky” stocks are tough. While interest rate increases already approved in the US and yet to be approved in Europe are a dramatic measure to try to stop this spiral, they are hurting the possible growth of riskier and more volatile securities such as those of tech companies. or of course cryptocurrencies. These rate increases will be higher across all accounts, making these cryptocurrencies less attractive to investors. So as we say more possible falls.