The price of bitcoin fell below $30,000 Tuesday morning, losing nearly all its 2021 gains as $100 billion was wiped from the crypto market, mirroring the sharp falls in global markets amid concerns the fast-spreading Delta variant of Covid-19 could hamper economic recovery.
Bitcoin fell roughly 6% Tuesday to just over $29,600 a token, only slightly above the $29,022 it started 2021 on and less than half an all-time-high of more than $64,000 in mid April.
Other major cryptocurrencies also fell, with ethereum down around 7%, cardano 10%, Ripple’s XRP 8% and dogecoin 9%.
While the precise cause of the fall is unclear, the crypto market is mirroring sharp falls in markets around the world—including the Dow Jones Industrial Average posting its biggest one-day drop since October—as experts fear renewed restrictions and a slower recovery caused by the infectious Delta Covid-19 variant.
Regulatory action against BlockFi, a bitcoin financial services platform, by New Jersey’s Office of the Attorney General on Monday evening also ignited fears of a broader regulatory crackdown, which have previously triggered sell-offs.
The infectious Delta variant is driving new waves of Covid-19 around the world, including in highly vaccinated countries that had already managed to control the virus. The variant, which is resistant to vaccines and possibly capable of causing more severe disease, is also driving a surge of new cases in the U.S. and many regions—including parts of Europe, Israel and Australia—are reinstating restrictions and lockdowns to contain outbreaks. Some areas, notably the U.K., are preparing to just “live with the virus” and England has dropped virtually all pandemic restrictions. While many scientists have branded this strategy as dangerous and ignoring the threat of long Covid, businesses have lamented the burden of a contact tracing system prompting people to self-isolate combined with such a high-case rate (the U.K. has the highest in the world), leaving them short of workers. As the path to recovery becomes less clear, the markets reflect this and are less optimistic.