Cryptocurrency prices also fell steeply. Bitcoin’s price fell as low as $26,000 on Thursday, down 60 percent from its November peak before surging slightly. Since the beginning of the year, Bitcoin price action has increased closely mirrored that of the Nasdaq, a benchmark heavily biased toward technology stocks, suggesting investors treat them like any other risky asset.

Ether’s price also plummeted, losing more than 30 percent of its value over the past week. Other cryptocurrencies like Solana and Cardano are also in the red.

Any panic may be overdone, some analysts said. A study by Mizuho showed that the average Bitcoin owner would not lose money on Coinbase until the digital currency’s price dropped below $21,000. According to Mr. Dolev, there could be a real death spiral.

“Bitcoin worked as long as nobody lost money,” he said. “Once it gets back to that level, that’s sort of the ‘oh my god’ moment.”

Professional investors who have weathered past crypto volatility have also remained calm. Hunter Horsley, chief executive of Bitwise Asset Management, which provides crypto investment services to 1,000 financial advisors, met with more than 70 of them this week to discuss the market. Many didn’t sell, he said, because all other assets were down as well. Some even tried to capitalize on the decline.

“Their point of view is, ‘This isn’t fun, but there’s nowhere to hide,'” he said.

Still, the falling prices have rocked crypto traders. Just a few months ago, blockchain advocates were predicting that the price of Bitcoin could go as high as $100,000 this year.

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