On November 26, Yahoo Finance's Jennifer Schonberger detailed bitcoin entering bear market territory and cited what experts were saying.
AKIKO FUJITA: Turning our attention to crypto, certainly has not escaped the sell-off that we're seeing today in this shortened session. Bitcoin is down, trading just above that $54,000 handle, entering bear market territory. Now it is down about 20% from the all-time high we saw just earlier this month. Let's bring in Yahoo Finance's Jennifer Schonberger, who's following that for us. And Jen, by the way, we say it's down from the all-time high. I mean, this is down significantly. It was $69,000 was the record we were talking about. Today at 54,000.
JENNIFER SCHONBERGER: Hey there. Good afternoon. Yeah, that's right. Bitcoin plunged into a bear market alongside the major sell-off that we're seeing in other risk assets amid concerns over that new strain in COVID. As you mentioned, the largest cryptocurrency by market cap sinking by more than 8% today to 54,000 and change. It is now down 20% since hitting that all-time high of nearly 69,000 just a couple of weeks ago. And that 20% drop, of course, putting Bitcoin in a bear market, a bear market defined as a 20% drop from the most recent all-time high.
Other cryptocurrencies are falling in sympathy as well with the risk assets sell-off. Take a look at Ethereum, the second largest cryptocurrency, off some 9%. Solana down over 10%. Of course, this risk sell-off coming after authorities in South Africa identified a brand new strain of COVID that could be more contagious and less resistant to vaccines, though it is still early innings right now. Chief economist at Capital Economics, Neil Shearing, says that the US and UK governments are approaching living with COVID, taking this more in stride, as opposed to perhaps other governments in Europe that are looking to impose more draconian lockdowns right now. So the proposition of a severe lockdown in the US perhaps less of a chance of happening right now.
Now, Bitcoin has been seeing a tough go of it the past week or so amid concerns of rising COVID cases, also as that new infrastructure law has embedded in their new tax reporting requirements for cryptocurrencies. In speaking with Leah Wald, the CEO of Valkyrie Funds, she tells me, quote, "As we've seen in the past, when traders go risk off to cash, they tend to liquidate riskier assets like Bitcoin, Ethereum, and altcoins. The good news here, though, is that digital assets tend to recover faster than traditional assets. And the end of the year has historically been bullish for the industry." She says they remain optimistic over the long-term. And while Wald says she tends to buy those dips, she's still evaluating the current situation now. Back to you.
KARINA MITCHELL: Jennifer, interesting to hear you say that Bitcoin traditionally does well at this time, as do equities. But there is nothing normal about the time of the year that we're in and the circumstances we're facing. But Bitcoin has sometimes been described as liquid gold, right? But it seems to have lost some of its luster. What happened to all of the fanfare over the futures ETFs that launched? It seems to have fizzled a little bit.
JENNIFER SCHONBERGER: Yeah, that's a great question and a great point. I think there was some elation that perhaps with the new Bitcoin futures ETFs, we could see more investors pile, in more money coming into the space. And that would temper some of the volatility we've traditionally seen in the crypto asset space that has not come to fruition. And today's sell-off just underscores that while some view this as a store of value, it does tend to operate as a risk asset when global markets do sell off, so something for investors to keep in mind.
As I mentioned, though, Bitcoin and other crypto have been under pressure over the past couple of weeks amid signs of an increase in COVID cases, which would have implications, of course, for economic growth. So you see the sell-off in risk assets. Therefore, you see the sell-off in Bitcoin and some of the other cryptocurrencies. So just a reminder that this remains an emerging asset class, and we should expect volatility to continue in this space.
KARINA MITCHELL: And that is the name of the game in this space. All right, Jennifer Schonberger, thank you so much for that insight.