The price of bitcoin dropped sharply Monday as investors began shedding risk amid an equity markets decline.
While bitcoin is often called a safe haven asset, the growing reality is its price tends to go down amid broader declines in risk assets. Also much like stocks, bitcoin’s price usually experiences a September slide.
Bitcoin lost 9% Monday and last traded at $43,818.20 according to Coin Metrics. The broader crypto market is in the red as well, with ether last down 10% to $2,985.95.
Investors are also focused on the the Federal Reserve and whether it will signal its readiness to start removing monetary stimulus from the economy. The central bank will begin its two-day meeting Tuesday.
The crypto decline comes as uncertainty about the regulation of stablecoins intensifies. The Financial Stability Oversight Council could designate them as systemically risky, the New York Times reported over the weekend, which could subject them and their operators to heavy regulation.
The President’s Working Group on Financial Markets is working up a report on stablecoins and the Fed is expected to put out a report on central bank digital currencies this month that could touch on stablecoin risks.
