Bitcoin drops 15% days after record high
Various causes may be to blame for volatility
Bitcoin dropped as much as 15% late Saturday, its biggest intraday drop since February, just days after hitting record highs.
It's unclear what caused the selloff.
The plunge in the world’s most popular digital coin came after reports attributed the decline to speculation that the U.S. Treasury may take action against money laundering that’s carried out using digital assets, according to Bloomberg.
The U.S. Treasury didn’t immediately respond to requests for comment from USA TODAY.
Separately, a blackout in China’s Xinjiang region, which reportedly powers a lot of Bitcoin mining, was blamed for the sell-off, Reuters reported, citing data website CoinMarketCap.
In 24 hours, the value of a bitcoin has shed 9.5%, falling from $61,306.11 to $52,810.06, according to CoinGecko, a crypto market data site.
Despite the declines, Bitcoin is valued at more than $1 trillion following a nearly 700% surge in the past 12 months.
The price of a bitcoin hit a low of $52,810.06 late Saturday after it tumbled more than $7,000 in a single hour, before the losses eased. Though the last time it touched that level was just three weeks ago on March 26. Bitcoin is down 15% from its high of $64,895.22 on Wednesday.
Despite the declines, Bitcoin is valued at more than $1 trillion following a nearly 700% surge in the past 12 months.
Other cryptocurrencies also fell over the weekend. Ether, the secondbiggest digital currency by market value, fell more than 10%.
Last week, bitcoin prices topped $64,000 as Coinbase, the largest U.S. crypto exchange, made its public debut on the Nasdaq.
The Coinbase listing, which was viewed as a landmark event for the cryptocurrency industry, has attracted amateur traders.
The sharp rise in the value of bitcoins has led to worries of a potential bubble in the cryptocurrency market, some analysts warn, with bitcoin more than doubling since the start of 2021. About 74% of those surveyed in Bank of America's latest global fund managers report said the world’s most popular digital coin is a bubble.
Bitcoin has been highly volatile. In late 2017, the digital token rose to nearly $20,000, before crashing to almost $3,000 the following year.
Dogecoin, the cryptocurrency created as a spoof, hit a record Friday. Heading into the weekend, it had soared more than 400% in the past week and skyrocketed by more than 5,000% since the start of the year.
Robinhood briefly suffered a “major outage” last week in the midst of Dogecoin’s rally, angering many retail investors.
Over the weekend, Dogecoin fell from its record high after topping 44 cents on Friday to hit a low of 24 cents on Saturday, though has recovered some of its losses and is currently trading around 31 cents.
Bitcoin had already been under pressure. It fell more than 4% Friday after Turkey’s central bank banned the use of cryptocurrencies from the end of April, saying crypto payments came with “significant risks.” India also reportedly is set to propose a law banning cryptocurrencies.
The euphoria surrounding Coinbase’s trading debut could trigger a short-term “buy the rumor, sell the event” type of reaction for investors, Edward Moya, senior market analyst at foreign-exchange trading service OANDA, said in a note.