Business Standard

Bitcoin finds floor after worst selloff since 2015

- TODD WHITE BLOOMBERG

Bitcoin clawed its way upward on Saturday along with most cryptocurr­encies, halting a four- day tumble that drew worldwide attention to the unregulate­d $500 billion market that's frequently called a bubble.

The recovery coincided with a pause in bearish news that had snowballed since Monday and shaved 24 per cent off bitcoin's value, its biggest four-day selloff since 2015. Comments by central bankers, a decision by Litecoin's founder to sell all his holding, and a wish to reduce stakes before the holiday season fueled the plunge, strategist­s said.

“With holidays approachin­g, some people want to step away from the table, and take their chips with them,” Marc Ostwald, global strategist at London-based ADM Investor Services Internatio­nal, said by phone from Warsaw. “Still, I wouldn't want to put it down too much to rationalit­y, because this is not a rational market.”

Bitcoin, the largest cryptocurr­ency by market value, shook the nascent trading world of digital coins on Friday when its interday plunge reached 30 per cent. The previous day, competitor litecoin recovered some of a 43 per cent intraday fall.

On Saturday, bitcoin rose 6.6 per cent to $14,978 at 11:41 am London time, compared with 24 hours earlier, according to data on coinmarket­cap. No. 2-ranked ethereum climbed 6.1 per cent, and litecoin was up 12.2 per cent.

In a late-week comment that undercut confidence, Michael Novogratz, the former Goldman Sachs Group Inc. and Fortress Investment Group LLC macro trader, said he's shelving plans to start a cryptocurr­ency hedge fund. He predicted that bitcoin may extend its plunge to $8,000. Earlier this month he predicted it could reach $40,000 within a few months.

Growing pains in the digital-coin world and warnings emerged all week, adding to volatility.

Coinbase, one of the larger trading platforms, on Friday said all buys and sells were temporaril­y unavailabl­e before they were re- enabled, according to its website. There were no incidents reported Saturday.

In South Korea, Yapian, the owner of bitcoin exchange Youbit, said Tuesday it would close and enter bankruptcy proceeding­s after a cyberattac­k that claimed 17 per cent of its total assets.

BaFin, European Union There's been a string of warnings by regulators for investors in digital coins. Felix Hufeld, president of German banking supervisor BaFin, advised consumers that trading in bitcoin would produce "bitter losers" and could result in a "total loss,” according to an interview with German newspaper Bild.

That echoed comments three days ago by the European Union's financials­ervices chief, Commission­er Valdis Dombrovski­s, who asked the heads of the EU's three financial supervisor­s to update their warnings to consumers "as a matter of urgency" in light of recent market developmen­ts, according to a letter seen by Bloomberg. “Huge rises and sudden, spectacula­r setbacks wouldn't surprise me going forward,” ADM’s Ostwald said. “The worry is going to be, at some point, the pips are going to start squeaking. Retail investors losing money will ask, ' Why aren't you intervenin­g to help me? And the answer is going to be, 'Well, this is a casino. On your head, be it.’ ”

The recovery coincided with a pause in bearish news that had snowballed since Monday and shaved 24% off bitcoin's value, its biggest 4-day selloff since 2015

 ??  ?? On Saturday, bitcoin,the largest cryptocurr­ency by market value, rose 6.6% to $14,978 at 11:41 am London time, compared with 24 hours earlier, according to data on coinmarket­cap.com.
On Saturday, bitcoin,the largest cryptocurr­ency by market value, rose 6.6% to $14,978 at 11:41 am London time, compared with 24 hours earlier, according to data on coinmarket­cap.com.

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