Bitcoin, other cryptocurrencies see 27% slide
NEW YORK: Bitcoin plunged on Thursday in a sell-off that saw other digital assets fall as much as 27%, a slide likely to stoke speculation about the durability of the latest boom in cryptocurrencies.
The largest token slumped as much as 13%, potentially heading for its worst day since the pandemic was declared in March.
The rout began just hours after Bitcoin rose to within $7 of its record high of $19,511, the culmination of a 250% surge in past nine months.
Fears over tighter crypto regulation and profit-taking after a frenetic rally were among the reasons cited for the sudden drop.
The sell-off gathered pace late Wednesday after Coinbase Inc. chief executive Brian Armstrong tweeted about speculation the US is considering new rules that would undermine anonymity in digital transactions.
“News that the Trump administration may clamp down on crypto might have been a trigger for the drop,” said Antoni Trenchev, managing partner of Nexo in London, which bills itself as the world’s biggest digital-coin lender.
“But any asset that rallies 75% in 2 months and 260% from the March lows is allowed to undergo a correction.”
Other coins including XRP tumbled as much as 27%, according to prices compiled by Bloomberg.
After garnering more support from Wall Street money managers and fund providers, the rally in cryptocurrencies had looked over-heated. The fierce retreat could stir yet another debate over the their value in diversifying portfolios.
“Conditions are very massively overbought and bound for a correction,” said Vijay Ayyar, head of business development with crypto exchange Luno in Singapore. “So I don’t think it’s unusual.”
Concern about potential US crypto rules help explain Thursday’s price drop across most major digital assets, said Ryan Rabaglia, global head of trading at OSL brokerage in Hong Kong.