Bitcoin and Other Crypto Assets Retreat After a Bounce as Volatility Reigns

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Both crypto assets and stocks are falling on Wednesday.


Bitcoin and other cryptocurrencies fell on Wednesday as concerns about the global economic outlook prompted a broad market selloff.

Bitcoin, the oldest and largest digital coin, slipped more than 4% to $20,205, according to CoinDesk. Ethereum was down 6%, while Avalanche and Solana both fell 7%.

The decline in digital assets mirrored the drop in Asian stocks and U.S. futures on Wednesday as concerns that central banks will have to aggressively raise interest rates to rein in inflation damped sentiment. Crypto assets have often traded in line with riskier, high-growth stocks, though the volatility and drops in crypto have been greater than for other assets in the past few weeks.

Goldman Sachs this week raised its forecast for the risk of a U.S. recession in the next year to 30%. Richmond Federal Reserve President Tom Barkin said that the fastest inflation in four decades means that more interest-rate increases should be expected, affirming expectations for another Fed rate boost of 75 basis points next month.

Bitcoin fell below the psychologically important level of $20,000 over the weekend. The currency reached a peak of almost $70,000 in November and has tumbled more than 56% this year.

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