Bitcoin hits $4,225 as sell-off continues
The slide helped fuel a sell-off among rival tokens Ether, Litecoin and XRP
Turmoil engulfed cryptocurrency markets again yesterday, with every major coin extending a rout that’s rocked confidence in the nascent asset class just as US regulators try to close in on alleged fraud.
Bitcoin tumbled below $4,225 (Dh15,518) to a 13-month low, before regaining some ground. The slide helped fuel a sell-off among rival tokens Ether, Litecoin and XRP, which pared an earlier loss that reached 17 per cent.
After months of enjoying relative stability, cryptocurrency bulls are left reeling by a sudden market downturn in November and increased regulatory reviews. Digital assets have now lost almost $700 billion of market value since crypto-mania peaked in January, according to CoinMarketCap.com.
Trading on futures markets, where investors can bet against Bitcoin, has soared.
While the trigger for the latest sell-off is unclear, it has coincided with a “hard fork” of Bitcoin Cash. The move, which split the offshoot of the original Bitcoin into two, has underscored the sometimes chaotic nature of a crypto community racked by infighting. Bitcoin, which began the year above $14,000, broke through its floor of around $6,000 last week.
“If you significantly slice through a level like $6,000, people don’t have a lot of protection below it — and then you see a lot of stop-loss selling which exacerbates the move,” said Marc Ostwald, global strategist at ADM Investor Services International.
Bitcoin, the biggest digital coin, was down 7.9 per cent as of 7.12am in New York. Ether, Litecoin and XRP all fell at least 8.8 per cent.
Regulatory concerns have also weighed on sentiment. On Friday, the US Securities and Exchange Commission announced civil penalties against two cryptocurrency companies that didn’t register their initial coin offerings as securities.
And yesterday, Bloomberg reported that the US Justice Department is investigating whether last year’s epic rally was fuelled in part by manipulation, with traders driving up Bitcoin with Tether — a popular but controversial digital token.