After a relatively strong 2021, bitcoin’s start to the new year is far from a banner one. In fact, data indicates that the world’s No. 1 crypto is looking at its worst start to a calendar year since 2014.
The weakness in the virtual asset comes as bitcoin added to recent losses on Friday, as the U.S. produced a weaker-than-expected 199,000 new jobs in December. Contributing to the spiral lower for bitcoin is the vicious cycle of increasing liquidations of bitcoin futures positions as values continue to erode.
Against that backdrop, the nascent asset is looking at one of its worst starts, in its current phase of maturity, in years.
Bitcoin
BTCUSD,
plunged to $41,012 late Thursday, marking the lowest price since September, according to CoinDesk data. The crypto was recently trading at around $41,800, down 2.2% over the past 24 hours and down roughly 40% from its November high of $68,991.
Bitcoin lost about 10.7% over the past seven trading sessions, on pace to record the worst seven-day performance in the first week of any year since 2014, after the cryptocurrency traded in three digits for the first time in 2013.
| Date | Bitcoin price | 7-Day Performance |
| 2014/1/7 | $802 | 6.2% |
| 2015/1/7 | $294.8158 | -7.83% |
| 2016/1/7 | $459.08 | 6.70% |
| 2017/1/7 | $907.2419 | -6.14% |
| 2018/1/7 | $16,171.3 | 16.51% |
| 2019/1/7 | $4,005.45 | 8.61% |
| 2020/1/7 | $8,164.047 | 13.90% |
| 2021/1/7 | $39,506.27 | 36.30% |
Source: Dow Jones Market data, CoinDesk
Though bitcoin supporters have long touted the cryptocurrency as a store of value and a hedge against inflation, bitcoin’s price has recently shown a strong correlation with other risk-on assets, especially growth stocks. Since mid-November when bitcoin’s price started falling, the cryptocurrency’s correlation with ARK Innovation ETF
ARKK,
and Renaissance IPO ETF
IPO,
grew to 0.79 and 0.83, respectively, according to crypto data analytics firm IntoTheBlock.
A more hawkish Federal Reserve has spooked investors, as last month’s Fed meeting, an account of which was released on Wednesday, showed talk among policy makers about how to more quickly move away from their current easy-monetary stance by hiking rates and shrinking the central bank’s $8.67 trillion balance sheet.
As bitcoin tumbles, a total of $367 million bitcoin futures positions betting on an upward price trend were liquidated Thursday, according to crypto derivatives data site Coinglass.
For other cryptocurrencies, ether
ETHUSD,
is down 5.7% over the past 24 hours to $3,180. Solana
SOLUSD,
logged a 6.5% loss to $138.6. XRP
XRPUSD,
declined 0.5%, trading at around $0.75. Meme token Dogecoin
DOGEUSD,
was down 2.5% to $0.15, while another dog-themed token, Shiba Inu
SHIBUSD,
retreated 2% to around $0.000029. Cosmos
ATOMUSD,
has outperformed the market, with a 15.7% gain over the past 24 hours, trading at around $42,7.
