Bitcoin tumbles toward US$5,000

HONG KONG: Cryptocurrencies resumed their slump, with Bitcoin falling toward US$5,000 in the wake of a split of one of the largest major tokens.

Bitcoin touched an October 2017 low and was trading at US$5,235.17 at 8:50am in London, according to consolidated Bloomberg pricing.

Rival coins including Ether and Litecoin also retreated, as the wider Bloomberg Galaxy Crypto Index fell as much as 6.9% to a one year-low on a closing basis.

XRP, the token associated with Ripple, was the lone gainer among major digital currencies.

Volatility has returned to cryptocurrencies, with the largest tokens shedding billions in market value since the hard fork of Bitcoin Cash last week, after two software-development factions failed to agree on a way to upgrade the offshoot of the original Bitcoin, leading to a computing power arms race.

The cryptocurrency industry has now lost more than US$660bil in value from a January peak, according to data from CoinMarketCap. com. Bitcoin is down more than 70% from its December 2017 high, the data show.

Thomas J. Lee, managing partner at Fundstrat Global Advisors and a long-time crypto bull, slashed his year-end price target for Bitcoin to US$15,000 from US$25,000.

The target is based on a fair value multiple of 2.2 times the breakeven cost of mining, which the firm pegs at US$7,000, according to a report last week. — Bloomberg