The key facts

  • Bitcoin fell 7.2% to $68,143 — its lowest since mid-August; it has lost 33.8% since the start of the year
  • Total crypto market capitalization shrank 5.8% to $2.3 trillion; ether fell 6.5% to about $1,610
  • Rising bond yields after inflation data and expectations of tighter regulation after the Democrats' victory are weighing on the market

Falling below $70,000

Bitcoin dropped below the $70,000 mark on Friday, reaching its lowest level since mid-August. By 09:00 GMT, the largest cryptocurrency was trading at $68,143, having lost 7.2% over the past day; during the day it fluctuated between a low of $67,653 and a high of $73,638. Since the start of the year, bitcoin has fallen 33.8%.

What is pressuring the market

The total capitalization of all cryptocurrencies shrank by 5.8% to $2.3 trillion. The second-largest cryptocurrency, ether, lost 6.5% over the day and was trading around $1,610. Pressure on non-yielding assets, which include cryptocurrencies, came from rising US Treasury yields after stronger-than-expected inflation data; high oil prices also added pressure on prices. Additional concern was caused by hawkish statements from Federal Reserve officials: some policymakers suggested that a rate hike of as much as 50 basis points might be needed.

The regulatory factor

Another factor was the outcome of the November midterm elections in the United States: the Democrats gained control of both chambers of Congress starting next year. According to market participants, this result raised expectations of increased regulatory oversight of the crypto industry.