The cryptocurrency market has resumed its downward trend from last week, tracking the stock market's decline.
According to CoinDesk, the world's largest cryptocurrency, bitcoin, plummeted to $31,075.70 on Monday evening, a 10% loss from Sunday at 5 p.m. EDT. Bitcoin's price has dropped 54% since hitting a peak of $67,802 in November.
It's on pace to have its worst five-day run since the five days ending March 16, 2020, when it dropped about 38%.
Ethereum, the second-largest cryptocurrency, plummeted to $2,286.10 on Monday, over 10% lower than its Sunday evening price.
Bitcoin and other cryptocurrencies are notorious for their wild price volatility. For years, individual investors dominated the market, but institutional investors, such as hedge funds and money managers, have begun to take control.
The market has become more aligned with regular markets as more professional investors trade crypto. Many institutional investors that purchase cryptocurrencies see them as high-risk investments, akin to technology stocks. During periods of market turmoil, investors tend to flee to safer areas.
Last week, the stock market fell the day after the Federal Reserve issued a half-point rate hike, the largest since 2000, to combat inflation. Additional rate hikes are possible this summer, according to Fed Chairman Jerome Powell. Some of the central bank's $9 trillion asset portfolio is also being unwound.
On Monday, the Nasdaq Composite, which is heavily weighted in technology, struck a new 52-week low, losing 26% year to date.
For much of 2022, cryptocurrency prices have remained unchanged as investors prepare for higher interest rates. According to CoinMarketCap, the crypto market has been busy in the last 24 hours, with about $155 billion in market volume. The global cryptocurrency market has dropped to $1.4 trillion.
Cryptocurrency firms have been attempting to establish themselves as household brands. With an influx of venture capital funding, crypto platforms have increased their expenditure on lobbying and direct marketing to customers.
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