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Bitcoin cryptocurrency.

OZAN KOSE/AFP/Getty Images

Bitcoin and other cryptocurrencies slumped Monday amid a global selloff in risk-assets, triggered by the mounting problems at embattled property giant China Evergrande Group.

Bitcoin, the world’s largest cryptocurrency, was off 8% early Monday to $43,800. It dropped to as low as $42,527 over the past 24 hours.

Ethereum, the second-largest cryptocurrency, was down 9% at around $3,060.

Smaller coins were also posting heavy declines, including Cardano, Binance, XRP, Solana, and Polkadot—the latter off 13% to $29.48.

Cryptos appear to be caught in a wave of global selling pressure that includes U.S., European, and Asian equities. Stocks in Hong Kong finished Monday with a loss of 3.3%. Markets in China and Japan were closed for a holiday.

U.S. crypto stocks aren’t being spared either with leaders like


Global (ticker: COIN) off about 3.5% to $235 in early trading. The Bitwise Crypto Industry Innovators exchange-traded fund (BITQ) was trading around $22.75, off 6%.

Cryptos are now close to breaching technical support levels, indicating that a deeper pullback may be coming.

Bitcoin and Ether are trading below their 50-day moving averages, a key support level, according to Katie Stockton, founder of Fairlead Strategies, a crypto research firm. A breakdown in support would occur if Bitcoin “closed” below $46,514 at 5 p.m. today and tomorrow. Bitcoin’s next support level would then be $39,910, she wrote in a note Monday.

The regulatory outlook is also getting tougher for exchanges and lending platforms. A U.S. government investigation into Binance, the world’s largest crypto exchange, is expanding, according to a report in Bloomberg. Authorities are looking into “possible insider trading and market manipulation,” seeking to determine if Binance staff profited off customer trades, Bloomberg reported.

A Binance spokesperson told Bloomberg that the exchange “has a ‘zero-tolerance’ policy for insider trading and a ‘strict ethical code’ to prevent any misconduct that could hurt its customers or the crypto industry.”

State regulators are also ramping up pressure on lending platforms, where investors can “stake’ their tokens in return for a yield. Alabama, Texas, and New Jersey regulators are now cracking down on the lending platform Celsius, claiming it’s offering unregistered securities through interest-bearing accounts. Celsius did not immediately respond to a request for comment.

Lending platform BlockFi is facing similar regulatory pressures in some states. Coinbase, meanwhile, has been warned by the Securities and Exchange not to launch a lending platform.

The selloff in cryptos may be an indication that investors’ appetite for alternative risk assets is living on borrowed time. The rise of cryptos has coincided with a flood of liquidity by global central banks aiming to boost economic growth amid the pandemic. That excess liquidity may be about to dry up, however, as the Fed gets ready to start tapering its bond purchases, a possible precursor to rising interest rates.

There’s also fear of contagion to other financial assets as China cracks down on its booming property sector and listings of tech stocks.

Cryptos may now be facing their stiffest test in years amid a sweeping global selloff. So far, they’re failing.

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