Bitcoin (BTC) enters bear market on new Covid variant

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Bitcoin prices fell sharply amid the global sell-off in equities.

Luke MacGregor  | Bloomberg | Getty Images

Bitcoin fell sharply alongside other assets on Friday, hitting a six-week low and officially entering bear market territory.

Bitcoin sank 7% in the last 24 hours to $54,561, according to Coin Metrics data, its lowest level since Oct. 8. The cryptocurrency is down 20% from an all-time high of nearly $69,000 which it hit earlier this month.

Bear markets are typically defined by a 20% decline or more from recent highs.

Other cryptocurrencies also plunged Friday. Ether, the second-biggest crypto, fell more than 10% to $4,007, while XRP slumped 10% to around 95 cents.

Digital currencies are falling in tandem with other risk assets amid panic over a new, heavily-mutated variant of the coronavirus first detected in South Africa.

The World Health Organization on Thursday gave a briefing on the new variant, which is known as B.1.1.529 and is thought to contain more than 30 mutations. The U.K. and other nations have temporarily suspended flights from six African countries in response.

Bitcoin has often been described by its proponents as “digital gold,” a reference to the yellow metal’s status as a so-called safe haven asset.

Crypto investors say the virtual currency offers a store of value as well as a hedge against inflation.

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