HONG KONG/LONDON/NEW YORK, May 9 (Reuters) – Bitcoin plunged to its lowest level since July 2021 on Monday, falling as U.S. stock markets slumped amid concerns over aggressive market tightening. Federal Reserve.

The world’s largest cryptocurrency by market capitalization, bitcoin fell to $30,331.28, falling for a fifth straight session. Bitcoin was last down 9.8% at $30,724.

Bitcoin has fallen 19% so far in May, losing more than half its value since hitting an all-time high of $69,000 in November last year.

The S&P 500 hit its lowest level since April 2021 on Monday, led by declines in mega-cap growth stocks. The Nasdaq fell more than 3%, while shares of Apple (AAPL.O) also fell more than 3% and were the largest weight on the Nasdaq and S&P 500.

Alex Miller, CEO of Hiro, believes that “market volatility stems from speculation. And because bitcoin is so speculative, its price and the rest of the crypto market go down alongside general markets.”

Hiro creates developer tools for Stacks, the network enabling applications and smart contracts for Bitcoin.

Ether, the world’s second largest cryptocurrency used for the Ethereum blockchain, fell to $2,245, its lowest since late January.

“The most important thing to do to prepare for bear markets is to have maintained a balanced portfolio and not overinvest in assets you can’t afford to wait out a crypto winter with,” Miller said. “As we’ve seen with every downturn, the best thing you can do with long-lived assets like bitcoin is to hold, or even increase your position if you’re willing to do so.”

Despite weak bitcoin prices, funds and related products saw inflows of $45 million last week, according to digital asset manager Coinshares in a report on Monday.

CoinShares investment strategist James Butterfill said investors took advantage of lower bitcoin prices.

The crypto sector as a whole also saw inflows of $40 million, according to the CoinShares report.

Matt Dibb, chief operating officer of crypto platform Stack Funds, said other factors in bitcoin’s decline came over the weekend during notoriously low liquidity in the crypto market.

There were also short-lived fears that the algorithmic stablecoin Terra USD (UST) could lose its peg to the dollar, Dibb noted.

Stablecoins are digital tokens pegged to other traditional assets, often the US dollar.

The UST is being closely watched both because of the new way it maintains its 1:1 dollar peg and because its founders laid out plans to build a $10 billion reserve of bitcoins to back up the stablecoin, which means that the volatility of the UST could potentially spread. in bitcoin markets. Read more

Reporting by Alun John in Hong Kong, Elizabeth Howcroft in London and Gertrude Chavez-Dreyfuss in New York; Editing by Kim Coghill and Will Dunham

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