Why is the price of bitcoin dropping?

Rumors of a forthcoming U.S. government strategy to regulate digital assets may have triggered the current sell-off. Gradual belt-tightening by the U.S. Federal Reserve may also be contributing to Bitcoin's price drop. The price of Bitcoin is likely to be increasingly correlated with the prices of other assets.

What is the correlation between Bitcoin and stocks?

More broadly, as Bitcoin matures and becomes more widely adopted, the price of Bitcoin is increasingly correlated with the prices of traditional assets like stocks. This growing correlation means that any event that triggers price declines in the traditional markets is likely to trigger similar or greater price declines for Bitcoin.

Why is bitcoin so weak?

The recent slide is a reversal from the dramatic rise that started in the second half of last year. Part of the reason for bitcoin’s weakness seems to be at least a temporary reversal in broader acceptance for cryptocurrency, as well as regulatory concerns and weakness in more speculative areas of financial markets.

What happened to bitcoin?

Bitcoin’s drop came as dogecoin – originally created as a joke – also fell back from its latest peak, after a remarkable surge this year. Dogecoin has gained more than 6,000% since the start of 2021, from $0.0046 to about $0.30 on Sunday, having briefly hit $0.43 on Friday.