Bitcoin has dropped to its lowest level since December 2020, as billions are wiped off the overall value of the leading cryptocurrency.

This year alone, the asset has dropped 45 per cent in value, falling a massive 62 per cent from its October 2021 peak.

Over the weekend, the coin fell 17 per cent to below US$23,000.

In the last few days, more than US$200 billion has been wiped off the entire cryptocurrency market, something eToro’s market analyst and crypto expert Simon Peters puts down to inflation fears.

“While cryptoassets have in the past not moved in step with traditional assets such as equities, in recent times the link between the two has grown ever closer,” Peters explains.

“Now the clearest signal yet that cryptoassets such as bitcoin and ether are moving in lockstep with equities has flashed, as inflation worries have sent stocks and crypto tumbling.

“The reasons for this are varied, but much of it comes down to institutional holders which calibrate their risk assets in similar ways, be they tech stocks or bitcoin.

“US monthly inflation dropped in April from 8.5 per cent to 8.3 per cent, suggesting price rises had found a ‘top’ – but fresh highs of 8.6 per cent last Friday have rattled equity and crypto markets alike.”