Bitcoin briefly drops below $40,000, lowest since September as investors shed risk

• Ether dropped 7% to as low as $2,950

• Crypto-related stocks turns red as the sell-off continues

Bitcoin fell nearly 7% at one point Monday to its lowest in over five months, tumbling under the $40,000 level, as rising rates lead investors to shed risky positions in growing assets.

The price of the world’s largest cryptocurrency fell to touch a low of $ 39816.94, to its lowest point since September but has since reclaimed some of its losses.

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Following the drop, it was traded about 1.5% lower at $41,500.

Ether, the second-largest cryptocurrency by market cap, fell more than 7% to below the $3,000 mark and tumbled as low as $2,950.

Along with the prices of cryptocurrencies, stocks related to digital assets also fell Monday.

Crypto exchange platform Coinbase fell 7.6%, while Microstrategy dropped nearly 7.2% and Block — formerly Square — almost 7%.

Crypto banks Silvergate and Signature were down by 10% and 5.4%, respectively.

Rising rates

Declines across the crypto market follow a week of rough trading for equities, particularly momentum stocks.

On Thursday,the coin fell below $41,000, as minutes from the Federal Reserve’s December meeting suggested that the U.S. central bank will reduce its pandemic-era stimulus and sparked a sell-off in global financial markets, which spread to cryptocurrencies

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Bitcoin’s November high of $69,000, after the U.S. government reported that its inflation 30 years high with its consumer prices jumped 6.2%, which forced investors to jump into inflation hedges, including digital assets and gold.

However, since its record high in November, Bitcoin prices have fallen nearly 40%.

Last week, Goldman Sachs said it sees Bitcoin snag away market share from gold in 2022 and potentially climb to $100,000 as the digital currency has become more widely adopted.

Picture Credit: CNBC