Yahoo Finance's Jennifer Schonberger details bitcoin entering bear market territory as other cryptocurrencies also drop.
- Welcome back. Well, we are in the midst of a nasty sell-off. As you can see, the Dow is off 670 points, S&P 500 off a little more than 1 and a 1/4%, and the NASDAQ off the least, down about 9/10%. But that is not the only asset class that is under pressure. I'm looking at the WIFI Interactive, and we can see Bitcoin off 6%, Ethereum off 7%, and we will to get a handle on what's going on here with Yahoo Finance's Jennifer Schonberger.
Jennifer, Bitcoin in a bear market now, off more than 20% from its highs. What's going on?
JENNIFER SCHONBERGER: Hey there, Jerry. Good morning to you. That's right. Bitcoin plunging into a bear market amid a massive sell-off in other risk assets this Black Friday morning as fears surge of a new COVID variant. The largest cryptocurrency sinking as much as 8% earlier in this session this morning, dipping down to $54,000 in change. It's now down 20% since hitting its all-time high of nearly $69,000 earlier this month.
That puts a 20% drop for Bitcoin into a bear market. Of course, a bear market defined as a 20% drop from the recent all-time high. Other cryptocurrencies also falling this morning. As you mentioned, Ethereum, the second largest cryptocurrency by market cap, off more than 8%. Solana down over 7%. The risk sell-off coming after, as I mentioned, a new variant of COVID was detected in South Africa that may be resistant to the vaccines.
Now Neil Shearing, the chief economist over at Capital Economics, says that in the US and the UK, governments are learning to live with COVID. And thus, the prospect of severe lockdowns, the likes of which we're seeing reimposed in Europe right now, may be less of a scenario, which would be a boost for the economy. As for Bitcoin, Leah Wald, CEO of Valkyrie Investments, 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 our industry. We remain optimistic over the long-term.
And Jared, while Wald sees optimism and tends to buy the dips, she's still assessing the current situation right now. Back to you.
- And we know you will continue to stay all over this one. Yahoo Finance's Jennifer Schonberger. All right.