Bitcoin tumbles as cryptocurrencies join global asset selloff
HONG KONG: Bitcoin, the largest digital currency, tumbled as much as 7% to the lowest since Aug 15, while the Bloomberg Galaxy Crypto Index slid over 10% in a third day of losses. Rival coins ether, XRP and litecoin also retreated at least 10%..
“The global sell-off in equities has indeed spilled over to the crypto space,” said Ryan Rabaglia, head of trading with cryptocurrency dealing firm OSL in Hong Kong yesterday.
“The days of crypto being the safe haven play and having a high degree of detachment from the rest of the world are seemingly diminishing.”
Increased institutional attention on the cryptocurrency space has led to greater correlation with traditional assets, although this trend is not expected to last, he said.
“With the 2018 low of US$5,800 being tested a number of times, our sights are set at that level for all further sell-offs,” Rabaglia said.
The biggest stock sell-off since February rolled from the US through Asia yesterday, with benchmarks across the region tumbling at least 4%, and China’s Shanghai Composite set to close at a four-year low. Concern about the ongoing impact of the US-China trade war, 10-year Treasury yields touching a 2011 high and the Federal Reserve’s monetary tightening are all contributing to the market nervousness.
Cryptocurrencies have wiped out more than US$600bil in value from a January peak as the boom in initial coin offerings last year fades further into memory.
Mainstream adoption of digital currencies has failed to materialise this year amid a series of exchange hacks and increased regulatory scrutiny.
“It is clear by now that bitcoin and other cryptocurrencies represent the mother of all bubbles,” Nouriel Roubini, chairman at Roubini Macro Associates and a professor at NYU Stern School of Business, said in prepared testimony for a US Senate Banking Committee hearing on cryptocurrencies and blockchain scheduled Thursday in Washington.
“No asset class in human history has ever experienced such a rapid boom and total utter bust and implosion,” Roubini said.
In a scathing testimony, Roubini argued the blockchain technology that underpins bitcoin and other cryptos is “the most over-hyped and least useful technology in human history” and “nothing better than a glorified spreadsheet or database.” — Bloomberg