Bitcoin, along with almost all of the crypto market, took a hammering early Friday as the momentum faded from earlier in the week.
Cryptocurrency miners are offloading Bitcoin to maintain cash reserves as the number-one digital coin reaches new heights in mining difficulty. That means there is more competition amongst miners to confirm a block - and extract a block reward, according to Cointelegraph.
What’s more, a report by leading crypto analysts Glassnode warned that digital tokens face a period of prolonged uncertainty due to “approaching storm clouds” of rising inflation, interest rate hikes, and uncertainty over Ukraine.
Further hitting sentiment, the Financial Stability Board said cryptos may soon pose a threat to global financial stability, intensifying concern over further regulation.
Over the past 24 hours, Bitcoin has plummeted 7.2%, below a recent key support level, to US$40,684, while closest rival Ethereum fell 6.1% to US$2,904.
Meanwhile, a report by Morning Consult found that young investors were finding alternative financing methods such as crypto to boost their financial well-being in January. These young investors were presumably hunting for bargains, with Bitcoin and Ethereum down more than 40% from all-time highs seen in November.
Elsewhere on Friday, popular alt-coins Solana, Avalanche, and Terra were among the fallers, losing 5.5%, 6.3%, and 9.6% in value respectively.
Outside of the top 10, Wrapped Bitcoin, Litecoin, and Near Protocol slipped 7.3%, 7.7%, and 7.5% respectively.
Dog-themed meme-coins Dogecoin and Shiba Inu eased 5.3% and 8.3%.
Overall, 97 of the leading 100 digital currencies were trading in red territory, with the three exceptions being stablecoins, which are pegged to a currency and have advanced no higher than 0.1% each.