As rising rates continued to drive investors to reduce positions in high-risk, growth-oriented assets like bitcoin, the price of bitcoin dropped to its lowest since September.

According to Coin Metrics, Bitcoin fell more than 6 percent to reach a low point of $39771.91. Ether, which is the second-largest cryptocurrency in terms of market capital, dropped more than 7 percent to $3,000 below. Coin Metrics discovered that the cryptocurrency fell as low as $2940.

After a rough week for equity, especially momentum stocks in technology, there have been declines across cryptocurrency markets. Investors have begun to shift into value and cyclical names as the U.S. Treasury 10-year yield rose to begin 2022. After ending at 1.5% in 2021, Monday’s 10-year saw a rise of 1.8%.

Noelle Acheson of Genesis’ market insight, stated that “we have seen bitcoin behave as a risk asset many times over the past months.” When the market becomes jittery bitcoin falls. We’ve seen various indications that market sentiment is somewhat spooked by the spike in the 10-year – that’s not good for any asset that has high volatility in cash flows. Bitcoin, which is unlike many assets affected by the same brush, can withstand more selling pressure and not take a huge hit.

In November, Bitcoin hit an all-time high of approximately $68,000. This was in response to a very hot inflation reading. It showed that consumers had experienced the greatest price rise in over 30 years. This reading prompted investors to invest in inflation hedges like bitcoin, as well as gold. Investors are divided on whether cryptocurrency is a good inflation hedge because it trades in tandem with stocks.

Since then, cryptocurrency prices fell steadily but have dropped sharper with stocks since the Federal Reserve announced last week that it intends to reduce its balance sheet. This is in addition to the tapering of bond and increasing interest rates that investors had been anticipating.