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A neon logo of cryptocurrency Bitcoin is seen at the Crypstation cafe, in downtown Buenos Aires, Argentina, May 5, 2022.AGUSTIN MARCARIAN/Reuters

Bitcoin fell below the psychologically important threshold of $20,000 on Saturday for the first time since late 2020, in a fresh sign that the selloff in cryptocurrencies is deepening.

The price of the most popular cryptocurrency had plunged as much as 9.7 per cent to less than $18,600 by late afternoon on the East Coast, according to the cryptocurrency news site CoinDesk. At some points during the day, it was below $18,000.

The last time bitcoin was at that level was in November 2020, when it was on its way up to an all-time high of nearly $69,000, according to CoinDesk. Many in the industry had believed it would not fall under $20,000 again.

Bitcoin has now lost more than 70 per cent of its value since reaching that peak.

Ethereum, another widely followed cryptocurrency that’s been sliding in recent weeks, took a similar tumble on Saturday.

It’s the latest sign of turmoil in the cryptocurrency industry amid wider turbulence in financial markets. Investors are selling off riskier assets because central banks are raising interest rates to combat quickening inflation.

The overall market value of cryptocurrency assets has fallen from $3-trillion to below $1-trillion, according to coinmarketcap.com, a company that tracks crypto prices. On Saturday, the company’s data showed crypto’s global market value stood at about $834-billion.

A spate of crypto meltdowns has erased tens of billions of dollars of value from the currencies and sparked urgent calls to regulate the freewheeling industry. Last week, bipartisan legislation was introduced in the U.S. Senate to regulate the digital assets. The crypto industry has also upped its lobbying efforts – flooding $20-million into congressional races this year for the first time, according to records and interviews.

Cesare Fracassi, a finance professor at the University of Texas at Austin who leads the school’s Blockchain Initiative, believes Bitcoin’s fall under the psychological threshold isn’t a big deal. Instead, he said the focus should be on recent news from lending platforms.

Cryptocurrency lending platform Celsius Network said this month it was pausing all withdrawals and transfers, with no sign of when it would give its 1.7 million customers access to their funds.

“There is a lot of turbulence in the market,” Fracassi said. “And the reason why prices are going down is because there is a lot of concern the sector is over-leveraged.”

Stablecoin Terra imploded last month, erasing tens of billions of dollars in a matter of hours.

Crypto had permeated much of popular culture before its recent tumble, with many Super Bowl ads touting the digital assets and celebrities and YouTube personalities routinely promoting it on social media.

David Gerard, a crypto critic and author of “Attack of the 50 Foot Blockchain,” said the recent meltdowns show a failure by regulators, who he believes should have put more scrutiny on the industry years ago. Many nascent investors – especially young people – invested in crypto based on a false hope that was sold to them, he said.

“There are real human victims here that are ordinary people.”