Bitcoin falls as investors retreat from risky assets
Digital currency drops below $7,000 in recent slump
PORTLAND, ORE.— Bitcoin tumbled for a fifth day, dropping below $7,000 (U.S.) for the first time since November and leading other digital tokens lower, as Lloyds Banking Group Plc joined a growing number of big credit-card issuers halting purchases of cryptocurrencies on their cards.
The biggest digital currency sank as much as 22 per cent to $6,702 in New York, according to composite Bloomberg pricing. It has erased almost 65 per cent of its value from a record high $19,511 in December. Rival coins also retreated on Monday, with Ripple losing as much as 19 per cent and Ethereum and Litecoin also weaker.
“Although no fundamental change triggered this crash, the parabolic growth this market has experienced had to slow down at some point,” Lucas Nuzzi, a senior analyst at Digital Asset Research, wrote in an email. “All that it took this time was a large lot of sell orders.”
Bitcoin’s longest run of losses since Christmas Day has coincided with investors exiting risky assets across the board, with stocks retreating globally. Bitcoin seems to be struggling to live up to any comparison with gold as a store of value, which is an argument made by some of its supporters.
Bullion edged higher as other safe havens — the yen, Swiss franc and European bonds — also gained.
Weeks of negative news and commercial setbacks have buffeted digital tokens.
A growing number of big creditcard issuers have said they’re halting purchases of cryptocurrencies on their cards, including JPMorgan Chase & Co. and Bank of America Corp. Several cited risk aversion and a desire to protect customers.
Jay Clayton, U.S. Securities and Exchange Commission chairperson, said he supports efforts to bring clarity to cryptocurrency issues and that existing rules weren’t designed with such trading in mind, according to prepared remarks for a Senate Banking Committee hearing Tuesday on virtual currencies.
Meanwhile, North Korea is trying to hack South Korea’s cryptocurrency-related programs to steal digital currencies and has already stolen tens of billions of won worth, Yonhap News reported.
And authorities in digital-coin powerhouse South Korea and other countries are weighing increased regulatory scrutiny of the industry, news that helped spark the ongoing sell-off.
Yet some Bitcoin stalwarts remain unconcerned.
“There are a few catalysts: people paying taxes and general mean reversion,” Kyle Samani, managing partner at crypto hedge fund Multicoin Capital, said in an email. “Overall, this is probably healthy given the run up in November-January.”