Bitcoin fell by 3.07% yesterday to close the session at the 30,847.0 level. The cryptocurrency has since fallen below the 30,000 level for the first time in a month and broken a two-day gaining streak. In weekly terms, it has fallen by 5.52%, losing ground for the third consecutive week.
Bitcoin markets have been suffering from volatility since April due to multiple reasons, chief among them the contradictory signals from both institutional investors and governments regarding cryptocurrency adoption. Most recently, volatility has been linked with a dwindling appetite for risky assets, among them cryptocurrencies and global equities.
“There’s been a broad sell-off in global markets, risk assets are down across the board,” commented an analyst at Amber Group, adding that there are still concerns regarding the quality and strength of the economic recovery.
Despite economies reopening and data suggesting that they are recovering, there are still downside risks that need to be faced, especially considering how quickly the Delta variant of the coronavirus is spreading. This has caused fear of slowing economic growth and eventual closures.
Since the beginning of the pandemic, 191,767,342 COVID-19 cases have been reported across the world, including 4,113,939 deaths. The most affected country is the United States, with 35,018,600 cases and 624,983 deaths, followed by India, Brazil, Russia and France.
Governments are now trying to vaccinate theirs populations against the virus, with 3.66 billion vaccine doses having been distributed among the world's population and 1.01 billion individuals now fully vaccinated, accounting for 13% of the world's population.
Another important factor is the regulatory scrutiny that Bitcoin miners and distributors have been facing from different governments, particularly the Chinese government, which recently has taken legal actions against Bitcoin miners to force them to shut down.
China claims that it is aiming to become carbon neutral and that Bitcoin mining requiring a lot of energy is incompatible with its goals. However, some suggest that the Chinese government considers Bitcoin a threat to the position of the digital yuan.
China is currently the main Bitcoin mining hub in the world, though China's recent moves have made the country less attractive to miners, who are now moving to the United States, the world's second-biggest mining destination.
By 9:08 GMT, Bitcoin fell by 5.5% against the US dollar to the 29,693.0 level.