Bitcoin, the bitcoin exchanges and cryptocurrencies were down nearly 40% at one point Thursday afternoon in pre-market trading. It came on the heels of a 30% decline in the previous day.
Large cryptocurrency exchanges such as Coinbase and Blockchain raised fresh capital this week — valuing each at more than $1 billion — and most felt the pressure in price. And the news poured cold water on speculation about bitcoin’s value surging as a new cryptocurrency– called Bitcoin Cash, or BCH– was launched.
Bitcoin, Ether, Cardano and Solana have all dropped around 30% to 40% in value this week on cryptocurrencies exchanges. The bitcoin market cap plunged to $137 billion, an all-time low.
The sharp drop comes amid broader market turmoil. Markets around the world have been volatile this week, with European shares headed for their second straight weekly loss, while the Dow industrials struggled to make it above 23,000 this week for the first time.
The price drops have pushed cryptocurrencies back to levels not seen since early May, according to Bloomberg data.
The drop in bitcoin has come despite widespread expectations that the U.S. Securities and Exchange Commission will approve bitcoin futures from Cboe Global Markets and CME Group. On Monday, Cboe introduced a test version of its bitcoin futures product on its market.
Bitcoin has become a flashpoint in Washington. This week, four Democratic senators sent a letter to the SEC arguing that its rules on virtual currencies “need to change now in order to prevent the exploitation of Americans by fraudsters, criminals, foreign governments, or terrorist groups.”
Another concern has been that in March, a South Korean exchange was hacked — exposing nearly all the funds in its millions of customer accounts, which has caused a plunge in bitcoin value in Korea.
A report from the Royal Institute of International Affairs this week said bitcoin has become the digital equivalent of the US dollar, and its rise this year has been akin to the 1980s oil crisis and the dot-com bust.
The report said the latest decline was a return to a “normalization” for bitcoin.
This week, Cboe revised its bitcoin futures contract downward, saying that the price of bitcoin will now trade at $13,000 — a lower level that is below a settlement for bitcoin futures exchanges traded last year.