Bitcoin dropped to a three-month low on Friday amid an ongoing selloff in the new year.
The price of Bitcoin dipped more than 2 percent to below $42,000 as of early Friday afternoon, according to CoinBase. The leading cryptocurrency is down nearly 40 percent from its record peak of $69,000 in November.
Bitcoin’s slump has intensified in recent days following the release of minutes of the Federal Reserve’s December Federal Open Market Committee minutes. During the mid-December meeting, officials indicated they could raise interest rates faster than expected amid tight labor conditions and rising inflation.
The outlook likely spooked investors concerned about pouring money into riskier financial assets.
Ongoing political unrest in Kazakhstan, the Central Asian country known as a hub of cryptocurrency mining, is also a factor. The country’s internet was shut down this week amid violent protests that have reportedly resulted in dozens of deaths.
Kazakhstan is the world’s second-largest center for Bitcoin mining, according to the Cambridge Center for Alternative Finance.
The crypto selloff isn’t limited to bitcoin. Ethereum sank more than 6 percent to $3,187.75, while solana fell more than 9 percent to $138.73.
While cryptocurrency prices have dropped quickly in recent days, proponents of the burgeoning digital assets say the long-term outlook is solid.
In a note to investors earlier this week, Goldman Sachs asserted the price of bitcoin could hit $100,000 within a few years if the cryptocurrency becomes more widely accepted as a “store of value,” alongside gold. The firm noted bitcoin already controls an estimated 20 percent of the “store of value” market.