Bitcoin Sinks Below $22,000. Crypto Stocks Coinbase and Marathon Digital Tumble.

But U.S. stocks fell Friday and shares in Asia and Europe declined as Federal Reserve officials offered slightly divergent views on the pace of future interest-rate hikes. St. Louis Fed President James Bullard on Thursday said he favored a three-quarters point hike at the Fed’s next meeting in September. Kansas City Fed President Esther George, however, said the “case for continuing to raise rates remains strong,” but added there was debate over “how fast that has to happen.”

Bitcoin and its peers should, in theory, trade independently of mainstream finance, but they have proved to be largely correlated to other risk-sensitive assets like stocks. 

Craig Erlam, senior market analyst at Oanda, said that while the trigger for the Bitcoin selloff wasn’t clear, “the fact that it has barely recovered any of those losses suggests there is substance to the move.”

Erlam added that the break below $22,500 “could be significant if it holds, with the next key test once more being $20,000.’ He added: “The crypto winter may not be over yet.”

Ether, the second-largest token, has dropped 8.7% over the past 24 hours to $1,697. Smaller tokens such as Solana and Cardano also fell sharply.

Crypto-related stocks such as Coinbase (ticker: COIN), Marathon Digital (MARA) and Riot Blockchain (RIOT) dropped 9.1%, 14.5% and 9.7%, respectively.

Write to Joe Woelfel at joseph.woelfelbarrons.com