The price of bitcoin briefly fell below $100,000 on Tuesday a shocking plunge from the cryptocurrency’s all-time-high of over $126,000 on Oct. 6. The world’s best known crypto hasn’t been priced below $100,000 since June.
Bitcoin dipped to $99,966, according to CNBC, before recovering above the $100,000 mark. Bitcoin is down 7% on the day and 13% on the week, according to CoinMarketCap. Crypto enthusiasts point to a similar slide in tech stocks this week, as traders worry they could be overvalued, according to Bloomberg.
Despite claims from the crypto community that digital money offers an exciting new world divorced from the constraints of fiat currency, the price of bitcoin often mirrors moves in the stock market. Palantir’s stock price is down 8% on the day despite posting another quarter of record revenue on Monday, and Nvidia is down over 3%.
Michael Burry, the investor who famously predicted the housing market crash in 2008, disclosed recent bets against Palantir and Nvidia, which has rattled people who are already nervous about the potential for an AI bubble to burst. Tech companies have invested billions in artificial intelligence but generative AI hasn’t produced the kind of productivity gains or revenue to justify that investment. At least not yet.
There’s also nervousness about signals from the Federal Reserve that it might not cut interest rates again next month after a rate cut last week. One of the things confusing matters at the moment is that policy makers don’t have a clear picture of the jobs market. The September jobs report was delayed and while the October jobs report is scheduled for this coming Friday, there’s uncertainty about how accurate the data will be.
The Fed has been leaning more heavily on private data from payroll company ADP, which shows a slowdown in hiring. But it remains to be seen just how bad the employment picture might be. President Donald Trump fired the head of the Bureau of Labor Statistics, Erika McEntarfer, in August because he didn’t like the numbers that were produced. Trump baselessly called the numbers “rigged.”
Fed Chair Jerome Powell referred to the the confusion over the numbers as a data “fog” when announcing the rate cut last week.
“What do you do if you’re driving in the fog? You slow down,” Powell said, according to Axios. “I don’t know how that’s going to play into things. […] But there’s a possibility that it would make sense to be more cautious about moving.”
Other top cryptocurrencies also struggled Tuesday, with Ether down 9% to $3,300 and XRP down 6% to $2.20. BNB, the fourth most popular cryptocurrency, is trading down over 6% and Solana is down almost 7%. TRON is down 1% and Dogecoin is down 5%.
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