Bitcoin fell to its lowest level since January on Monday as slumping equity markets continued to hurt cryptocurrencies, which are currently trading in line with so-called riskier assets like tech stocks.

Bitcoin dropped to as low as US$33 266 in morning trade, testing the January low of $32 951. A fall below that level would be it lowest since July last year.

It then steadied to trade around $33 500, down 1.4%.

“I think everything within crypto is still classed as a risk asset, and similar to what we’ve seen with the Nasdaq, most crypto currencies are getting pummelled,” said Matt Dibb, chief operating officer of Singapore-based crypto platform Stack Funds.

The tech heavy Nasdaq fell 1.5% last week, and has lost 22% year to date, hurt by the prospect of persistent inflation forcing the US Federal Reserve to hike rates despite slowing growth. Nasdaq futures were down a further 0.8% in Asia trade on Monday morning.

Dibb said other factors in the decline over the weekend — bitcoin closed on Friday around $36 000 — were the crypto market’s notoriously low liquidity over the weekends, and also short-lived fears that the algorithmic stablecoin called terra USD (UST) could lose its peg to the dollar.

Stablecoins are digital tokens pegged to other traditional assets, often the US dollar.

UST is closely watched by the crypto community both because of the novel way in which it maintains its 1:1 dollar peg, and because its founders have set out plans to build a reserve of $10-billion worth of bitcoin to back the stablecoin, meaning volatility in UST could potentially spill over into bitcoin markets.