Bitcoin plunges as U.S. eyes spiking recession risks

On Monday, the bitcoin price lost 10% of its value to fall below $55,000 as fears of a slowdown in growth and an impending recession grew. The moment marks a sudden reversal for a market that has largely ridden an upward growth wave over the past year, particularly on the heels of artificial intelligence (AI) stocks.

Over the past 24 hours, bitcoin’s price has fallen below $50,000, but has rebounded to around $54,000 at press time. This change marks one of the lowest prices for the world’s largest cryptocurrency since February. Multiple factors are affecting bitcoin’s performance: ongoing tensions in the Middle East, fears of a policy error by the Fed, and other macroeconomic factors are shaking bitcoin investors’ confidence.

“[There are] potentially some signs [U.S.] “The market is slowing down a bit. I think that spooked some people on Friday and also you see the Japanese market was already closed when this happened, so you see Japan reacting to what happened last week,” Shanti Kelemen, chief investment officer at M&G Wealth, told BBC Today.

“The sell-off we saw in Bitcoin over the weekend should serve as a warning to those who advocate and celebrate the idea of ​​holding BTC as a U.S. Treasury asset,” said Michael Brescia, CEO and co-founder of Cerus Markets, adding that the world’s leading cryptocurrency is expected to continue its decline during the U.S. session.

Brescia also warned the US against stockpiling bitcoin in its national reserves. “One day, bitcoin could be bigger than gold, but today it’s not even one-fifteenth as big. So we have a long way to go before we even consider including such a volatile asset in our national reserves.”

“We are entering a dubious period for stock markets, with inflation returning as some predict and fears of a global recession rising,” he explained. “Whether or not that happens, we can be thankful that U.S. reserves are not tied up in bitcoin.”