Bitcoin tumbled as much as 10 percent yesterday to below US$4,500, bringing the world’s best-known cryptocurrency’s losses to 30 percent within a week, as a selloff in digital currencies intensified across the board.
Other cryptocurrencies also skidded sharply, with Ethereum’s ether losing 10 percent and Ripple’s XRP down 13 percent in a largely sentiment-driven slide.
The latest move lower started this month after a period of relative stability, with prices of bitcoin having hovered at about the US$6,500 mark for several months.
Photo: Reuters
“The euphoria has died and prices have consolidated with lower lows and lower highs. A lot of people have lost interest,” Forex.com analyst Fawad Razaqzada said.
Yesterday’s falls coincided with broader drops in financial markets. European shares weakened following a big fall on Wall Street.
As well as a general decline in investor confidence in the value of cryptocurrencies, some traders have also blamed the recent drop on fears that a “hard fork” in bitcoin cash, where the smaller coin that split into two separate currencies, could destabilize others.
Bitcoin was trading yesterday at US$4,354.20, its lowest level on the Bitstamp exchange since October last year.
It has lost about 75 percent of its value since peaking in December last year.
A regulatory clampdown on cryptocurrency trading early this year and a drop in investor interest have sent people scrambling for the exit.
Cryptocurrency advocates say price volatility is to be expected and that the need for virtual currencies that operate outside the mainstream banking system would outlast any short-term price falls.
The second and third-largest cryptocurrencies, XRP and ether, were trading at US$0.4451 and US$133 respectively on the Luxembourg-based Bitstamp exchange.
According to industry tracker Coinmarketcap.com, the total market capitalization of virtual currencies is now below US$150 billion, down from about US$800 billion in January.
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