Bitcoin as one point traded as low as $53,549, its lowest level since early October.
The cryptocurrency is down 20% from an all-time high of nearly $69,000 which it hit earlier this month.
Bear markets are typically defined by a decline of 20% or more from recent highs.
Bitcoin fell sharply alongside other assets on Friday, hitting a seven-week low and officially entering bear market territory.
The world’s biggest cryptocurrency sank nearly 8% in the last 24 hours to $54,321, according to Coin Metrics data. The slide brought bitcoin to its lowest level since early October.
Bitcoin is down more than 20% from an all-time high of nearly $69,000 which it hit earlier this month. Bear markets are typically defined by a decline of 20% or more from recent highs.
Other cryptocurrencies also plunged Friday. Ether, the second-biggest crypto, fell more than 10% to $4,059, while XRP slumped 9.9% to just under 95 cents.
Digital currencies are falling in tandem with other risk assets amid panic over a new, heavily-mutated variant of the coronavirus first detected in South Africa.
World Health Organization to discuss mutated B.1.1.529 Covid variant
The World Health Organization on Thursday gave a briefing on the new variant, which is known as B.1.1.529 and is thought to contain more than 30 mutations. The U.K. and other nations have temporarily suspended flights from six African countries in response.
Global stock markets were sinking Friday, with European stocks set for their worst session in more than a year and U.S. stock futures down sharply.
Investors are retreating from riskier assets for the relative safety of bonds, with U.S. Treasury yields moving sharply lower. Bond yields move inversely to prices.
Bitcoin has often been described by its proponents as “digital gold,” a reference to the yellow metal’s status as a so-called safe haven asset.
Crypto investors say the virtual currency offers a store of value as well as a hedge against inflation.
It’s worth noting that bitcoin is a volatile asset, and has been known to experience price swings of more than 10% on a single day.