The value of bitcoin has fallen sharply since reaching record heights last month, briefly falling below $90,000 on Tuesday compared with above $126,000 at the start of October.Below AFP explains why investors are turning away from the volatile asset.

Bitcoin first surpassed $100,000 in May before reaching its latest record of around $126,251 last month.Support came also from expectations of an interest-rate cut from the Federal Reserve following weak US jobs data, which weighed on the dollar.

However, after Trump reignited fears of a trade war with China last month, investors sought safer assets over volatile cryptocurrencies.Those who had bet on bitcoin continuing to rise lost heavy amounts.

According to Rachael Lucas, a crypto analyst at BTC Market, $20 billion of bitcoin trades were liquidated.Bitcoin lost one quarter of its value between striking the early October record and falling under $90,000 on Tuesday.

Other cryptocurrencies declined Tuesday, including Dogecoin, the speculative digital token promoted by Elon Musk.All assets perceived as less safe, such as stocks, are taking a hit on financial markets after the longest US government shutdown on record prevented the release of key economic data.

Source:Ndtv