The market for digital currencies such as Bitcoin was originally positioned to withstand the drastic fluctuations in other areas of the financial market.

But now they have gradually lost their valuablebitcoin mining app "hedging" attribute and started to "drift with the current".

Faced with a decrease in market liquidity as a result of the Federal Reserve's increasingly aggressive "closing," not only have technology stocks begun to drive the stock market down, but the performance of digital currencies is even worse.

Bitcoin fell 12% on Friday to below $37000, a new low since last August, according to CoinDesk data. It fell below $35000 on Saturday, nearly halving its peak from last November.

Other digital currencies, in addition to Bitcoin, performed poorly.

Another major market participant, the Ethereum currency, fell 8.3% on Friday, with the latest offer currently at $2456, down nearly 50% from the high reached in November.

Solana and Cardano were down 17% and 61%, respectively, from last year's highs.

In terms of market value, Bitcoin, the most valuable digital currency, has lost more than $600 billion since its peak last year, and the entire digital currency market has lost more than $1 trillion.

On November 8, 2021, the total market value of digital currencies reached a record high of $2.93 trillion. However, it has been declining for more than two months and has now dropped below $2 trillion.

According to Clara Medalie, research director at digital money market data provider Kaiko:

Global policy changes are affecting digital currency, which is no longer an isolated risk asset. Both the stock market and Bitcoin are becoming more volatile as liquidity tightens.

Kaiko noted that the "correlation" between digital currencies and the stock market has reached its highest level since September 2020, indicating that the two have a close relationship and that digital currencies will follow the stock market's decline.

According to Antoni Trenchev, co-founderantminer a10pro and managing partner of digital currency bank Nexo, the correlation between Bitcoin's focus on technology stocks and the Nasdaq 100 Index is approaching a decade high.

Furthermore, there is a link between Bitcoin and Cathie Wood's ARK Innovation ETF, which is an example of focused speculation.

The correlation between the two has reached 60% since 2022, according to Katie Stockton, founder and managing partner of Fairlead Strategies, a technology analysis and research firm, which "reminds us that digital currencies such as Bitcoin are classified as risky assets, not investment havens."

According to the Wall Street Journal, investors who have deployed large amounts of digital currencies have become more sensitive to the stock sell-off trend.

According to analysts, the sell-off tide affecting popular technology stocks may prompt investors to re-liquidate their cryptocurrency positions, limiting overall losses in order to meet margin requirements.

According to Hayden Hughes, CEO of Singapore Alpha Impact, clearing the margin position creates an additional wave of selling pressure because collateral assets can be sold forcibly.

As digital currencies fell in value, so did relevant individual stocks.

Coinbase Global, a popular trading platform for individual investors, fell 13% on Friday, matching its biggest one-day decline in history and dropping to its lowest level since its IPO last July; Robin Hood Markets Inc., a popular trading platform for individual investors, also fell nearly 7% on the same day, dropping to its lowest level since its IPO last July;

MicroStrategy, a software company that has invested billions of dollars in Bitcoin, fell 18% as well.

One wave has not flattened, and another has risen.

Simultaneously, many countries will conduct a more stringent review and control of digital currencies.

A person familiar with the matter told Bloomberg bitcoin earnNews that the Biden administration may release a preliminary strategy on digital currency next month and ask federal agencies to assess its opportunities and risks.

As previously reported on Wall Street, regulators in the United Kingdom, Spain, and Singapore all hinted last week that they would tighten restrictions on selling digital assets to inexperienced investors. On Thursday, the Russian Central Bank proposed a total ban on digital currencies.

Also on Thursday, the European Union's top financial regulator reiterated its call for an EU-wide ban on major Bitcoin mining models. Thed é en, Deputy Chairman of the European Securities and Markets Authority, warned that if no intervention was taken, a large amount of renewable energy would be used for Bitcoin mining.