Bitcoin falls below $46k, other crypto currencies also drop

The largest cryptocurrency by market value declined 2.5% to $45,583 on Monday

Bitcoin price today extended its five-week slide from an all-time high with risk sentiment across global financial markets dwindling.

The largest cryptocurrency by market value declined 2.5% to $45,583 on Monday in New York. It has slumped nearly 32% since setting a record high in early November.

Ethereum fell 4.3%, while DeFi tokens such as Solana, Cardano, Polkadot and Polygon also dropped.

Central banks globally are prioritizing the fight against higher inflation by tightening monetary measures, while also keeping an eye on the impact of the omicron variant of coronavirus. That backdrop has investors questioning whether so-called risk assets such as cryptocurrencies and technology shares are due for a rougher patch after surging from pandemic lows.

In a nod to the decentralized aspirations of crypto, the handful of funds offered -- which go by names such as Index Coop, Indexed Finance, PieDAO, and BasketDAO -- are run by decentralized autonomous organizations (DAOs) that are governed by software programs and user communities.

Over the past year, these community-run index funds have raised hundreds of millions. Launched about a year ago, Index Coop -- likely the biggest -- manages about $343.5 million for more than 26,000 users, said Simon Judd, head of business development. Synthetix, which offers a slew of non-index products as well as a decentralize finance, or DeFi-tracking index, has about $386 million in assets. Indexed Finance has nearly $11 million.

The index DAOs are still relatively small, compared with around $2.2 billion invested in crypto index funds, according to a tally kept by James Seyffart at Bloomberg Intelligence.

While only accredited investors can invest directly into many centralized crypto index funds, index DAOs are usually open to anyone. Much of a DAO’s financial activity is also registered on the blockchain -- often, Ethereum -- for anyone to see.

The positive aspect of investing through a DAO is you, as an average retail user, get to have more say in the products that come out, said Hany Rashwan, co-founder and CEO of 21Shares, a provider of crypto exchange-traded products. You and I, if we owned an index token could go and suggest an index of the metaverse to be created and maybe even have opinions of what should be in it; and if we can convince enough of the people, we can move forward and force the organization to do this.