Bitcoins’s downfall took down entire crypto market cap by $113B

Volatility then picked up as the digital asset tumbled. Commentators have cautioned that a sustained drop below US$30,000 could presage further losses.

With the Bitcoin (BTC) price dipping below a $29,000 threshold, the investor mood is worsening and the Crypto Fear and Greed index has plunged to October 2020 levels.On Jan. 22, the Crypto Fear and Greed index sharply dropped to a value of 40, moving the market sentiment from "Extreme Greed" to "Fear". Many said that BTC has become a mainstream investment and a safe bet against dollar weakness and faster inflation.

The world's largest cryptocurrency dropped as low as $29,327 as of 8:29 a.m.in Hong Kong on Friday, after a slide of nearly 11% a day earlier.

For instance, Grayscale Investments, which is behind a popular Bitcoin trust, saw total inflows of more than $3 billion across its products in the fourth quarter.

Recent comments by US Treasury Secretary-designate Janet Yellen may be among the reasons for this week's bitcoin swoon, said Mr Jehan Chu, managing partner at blockchain advisory firm Kenetic Capital in Hong Kong.

Bitcoin fell beneath $30,000 as it continues to retreat from the document highs arrived at all through a furious rally about the past two months. During the confirmation hearing of her Senate position, Yellen informed the cryptocurrency is an area of concern for criminal financing and terrorist.

Some strategists are more skeptical.

Bitcoin was trading more than 20 percent below the record high of $42,000 hit two weeks ago, losing ground amid growing concerns that it is one of a number of price bubbles and as cryptocurrencies catch regulators' attention. UBS Global Wealth Management recently warned that there is nothing stopping a wipeout in big-name digital currencies eventually amid regulatory threats and central bank-issued competitors. The next key level is US$27,750 - if Bitcoin falls through that it could retest US$25,800, he said.

Second-biggest cryptocurrency ethereum also dropped to a one-week low, of US$1,041.22, before recovering to steady around US$1,144.

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