Bitcoin falls below $ 20,000 for the first time since late 2020

Square, another payment company, bought $ 50 million in Bitcoin and changed its name to Block, in part to signify its work with blockchain technology. Tesla bought $ 1.5 billion. Venture capital firm Andreessen Horowitz raised $ 4.5 billion for a fourth cryptocurrency-focused fund, doubling its predecessor.

The excitement peaked in April last year when Coinbase, a cryptocurrency exchange, went public with a valuation of $ 85 billion, an exit party for the industry. Bitcoin surpassed $ 60,000 for the first time.

Last summer, El Salvador announced that it would become the first country to classify Bitcoin as a legal tender, along with the U.S. dollar. The country’s president updated his Twitter profile photo to include laser eyes, a business card for Bitcoin believers. The value of El Salvador’s $ 105 million investment in Bitcoin has halved as the price has fallen.

U.S. senators and mayors began promoting cryptocurrency as the industry spent a lot on lobbying. New York Mayor Eric Adams, who was elected in November, said he would take his first three payment checks in Bitcoin. Senators Cynthia Lummis, a Wyoming Republican, and Kirsten Gillibrand, a New York Democrat, proposed legislation that would create a regulatory framework for the industry, giving more authority to the Commodity Futures Trading Commission, an agency that cryptocurrency companies have openly courted.

Through the frenzy, celebrities fueled the fear of getting lost, whipping up their NFTs on talk shows and talking about blockchain projects on social media. This year, the Super Bowl included four ads for crypto companies, including Matt Damon warning viewers that “fortune favors the brave.”

This boastful optimism fell this spring as the stock market plummeted, inflation soared and layoffs hit the tech sector. Investors began to lose confidence in their cryptocurrency investments, shifting money to less risky assets. Several high-profile projects crashed in the middle of the retreats. TerraForm Labs, which created TerraUSD, a so-called stablecoin, and Celsius, an experimental cryptocurrency bank, collapsed, eliminating billions of dollars and sending the wider market into a slump.

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