The value of Bitcoin dropped below $40,000 in early morning trading today.
The popular cryptocurrency sold off sharply this morning, while rival tokens such as ether have also lost value. Bitcoin is currently worth $39,831 per coin, while bitcoin is down 4.3% and ether is down 5.1%, according to Coinbase data.
While it is always risky to cover price changes in the crypto world, the decline in the value of Bitcoin has gone beyond the minimal noticeable to the physical. Yahoo Finance notes that the all-time high for bitcoin saw the cryptocurrency trade at $68,789.62 per coin. Today’s price puts the current Bitcoin pullback at just over 42%.
That’s twice the swing needed for bitcoin to enter a technical bear market, and four times what it would take to meet the correction requirements.
But the price drop in the value of some cryptocurrencies is not slowing down the decentralized world. Crypto-focused publication The Block noted this morning that NFT trading volumes on the popular OpenSea market are strong to start the year. So, Web 3 activity looks strong by some metrics, despite the recent price drops; It is not yet clear if today’s selling will have an impact on NFT trading activity, to stick to this particular example.
For other participants in the crypto market, selling could hurt results in the near term. There is a historical and positive correlation between the rise in cryptocurrency prices and trading volumes. Companies like Coinbase and others are charging the daily bread of trading fees, which means that the cryptocurrency’s price declines generally fall below its financial performance. Of course, the past is not a perfect indicator of the future, but today’s selling is not specifically bullish.
Cryptocurrencies aren’t the only volatile assets trading lower this morning: tech stocks as a whole are down 1.81% (Nasdaq Composite), while software stocks are down 2.62% more painfully (WisdomTree cloud computing fund).