Cryptocurrencies Selloff news: Why has Bitcoin price dropped below $40,000?

Bitcoin, the cryptocurrency with the largest market value in the world, dropped below $40,000 on Friday to its lowest level since August 2021, according to CoinDesk.

The coin fell as much as 8.7% before regaining some ground and trading at $38,616.17, down 6.7% at the end of Thursday and over 40% from its record-high in November 2021. The fall came after the stock market selloff that saw Wall Street stocks drop on Thursday.

It is now more common to see the Bitcoin dollar value drop when stocks fall, confirming investor worries of how Federal Reserve interest-rate increases will affect other markets. Clara Medalie, research director at cryptocurrency market data provider Kaiko, spoke on how cryptocurrencies are no longer an isolated risk asset.

"Cryptocurrencies are no longer an isolated risk asset and are responding to changes in global policy," said Medalie. "It's not surprising that both will start to become more volatile as the liquidity taps turn off.