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Bitcoin slid below $90,000 on Monday as a historic sell-off in the cryptocurrency market extended into December.
The price of the world’s foremost cryptocurrency fell by around 6 per cent on Monday to $85,100.
The decline comes after bitcoin dropped by nearly $20,000 in November, marking the crypto asset’s biggest monthly decline since May 2021.
Investors have grown increasingly concerned about lofty valuations for risky assets in recent weeks. Shares in some of the world’s largest technology companies have also come under pressure amid anxieties about underwhelming returns on the wave of investment into artificial intelligence infrastructure.
A combination of uncertainty over whether central banks can continue to cut interest rates next year given sticky inflation and persistently high borrowing among rich economies have added to market volatility.
Bitcoin is viewed as a barometer for traders’ general risk appetite. Shares in Strategy, the largest corporate owner of bitcoin, also fell sharply on Monday. The company said that it could book a $5.5 billion loss in its full-year financial accounts compared to a previous forecast of net profit of $24 billion, caused by the latest fall in the price of bitcoin.
The recent sell-off in crypto assets represents a reversal in the asset class’s fortunes in the first three quarters of the year when investors piled into cryptocurrencies on hopes that the Trump administration would create a more welcoming regulatory environment for the sector.
The price of a single bitcoin topped $120,00 as recently as October. Bitcoin is now down about 30 per cent from its recent peak.
Elsewhere on Monday, silver prices leapt to a record high of $57 per ounce, sending several mining constituents of the FTSE 100 to the top of London’s blue-chip index.
Unlike cryptocurrencies, precious metals tend to be popular investments during times of uncertainty and when traders’ appetite for risk is weaker.
Tight supplies of silver and fears that the Trump administration could hit imports of the white metal with tariffs are also likely to have driven prices, which have doubled over the past year, higher.
Investor demand for precious metals has gathered pace this year thanks to a historic bull run in the gold market. Silver is a more affordable asset that investors can purchase and still gain exposure to the precious metals sector.
Oil prices also gained around 1 per cent on Monday following attacks by Ukrainian drones on Russian shadow fleet tankers and affirmation from the Opec cartel that they would not step up production in the first quarter of next year.