Bloomberg
Bitcoin shows worst weekly drop since March amid liquidation
(Bloomberg) – Bitcoin’s surge took a leap of speed when the world’s largest cryptocurrency witnessed its worst weekly decline in nearly a year amid greater losses in risky assets. The digital token fell 20% this week, the largest since the last sale driven by the March pandemic. The broader Bloomberg Galaxy Crypto Index, tracking Bitcoin, Ether and three other cryptocurrencies, fell 23% in the same period. Bitcoin fell 5% to trade at $ 45,672 starting at 5 pm in New York, according to consolidated prices compiled by Bloomberg. “It is a market that was ridiculously overbought and is likely to be again in the not too distant future,” Craig Erlam, a senior market analyst at OANDA Europe, said in a note on Friday. The difficulty for Bitcoin comes amid increased volatility in global markets, with an increase in bond yields announcing growing expectations that growth and inflation are rising and forcing traders to reevaluate their positions in various asset classes. The high-tech Nasdaq 100 has fallen further since October this week, with stocks like Tesla Inc. and Peloton Interactive Inc. “Risky assets are currently suffering – we are seeing stocks falling and cryptography is going on,” said Vijay Ayyar, Asia-Pacific chief for cryptocurrency exchanges Luno in Singapore. “The dollar is appreciating, which is a good indication of expecting a drop in Bitcoin and cryptography.” Bitcoin’s weakness in the face of market fluctuations raises questions about its effectiveness as a store of value and protection against inflation, a key argument among supporters of its impressive rally last year. Detractors have maintained the rise in digital assets as a speculative bubble and are destined for a repeat of the 2017 boom and collapse. In a Flash, U.S. yields reach 1.6%, wreaking havoc in the markets. While Bitcoin is often presented as the new “digital gold”, yellow metal is gaining at the moment, with spot gold trading at $ 1,734 an ounce, down about 3% on the week. The Bloomberg Dollar Spot Index rose 0.9% in the same period, its strongest gain since October. Heavy sales at the Grayscale Bitcoin Trust, the world’s largest fund, as well as the expiration of Bitcoin options are also contributing to volatility, Ayyar said. The trust fell 24% this week, with losses outpacing its underlying asset, when a once-massive price premium on Bitcoin went negative with investors profiting from those gains, he said. Prominent numbers across the financial world have also weighed in recently on Bitcoin. Tesla, Elon Musk, said prices “look high” over the weekend, seen by some as an initial catalyst for the week’s settlement. Cathie Wood of Ark Investment Management later said in an interview with Bloomberg that she was “very optimistic about Bitcoin”, but did not reveal whether Ark had made a purchase. Earlier this week, the co-founder of Microsoft Corp. Bill Gates said in an interview with Bloomberg Television that he was not a fan of Bitcoin, while Treasury Secretary Janet Yellen said that the token was an “extremely inefficient way of conducting transactions”. (Update prices, chart) For more articles like this, visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source. © 2021 Bloomberg LP