Bitcoin is on track for its worst monthly performance since a string of corporate collapses rocked the wider crypto sector in 2022.
The largest cryptocurrency yesterday slid as much as 6.4 percent to US$81,629 before paring losses, according to data compiled by Bloomberg.
It was trading at US$84,166 at 7:42am in London. Ether fell as much as 7.6 percent to below US$2,700.
Photo: Reuters
Bitcoin has now shed about 23 percent of its value this month — the most in a single month since June 2022, according to data compiled by Bloomberg.
The implosion of Do Kwon’s TerraUSD stablecoin project in May of that year sparked a daisy chain of corporate failures that culminated in the downfall of Sam Bankman-Fried’s FTX exchange.
Despite a pro-crypto White House under US President Donald Trump and surging institutional adoption, bitcoin has plummeted more than 30 percent from its record high set early last month.
The rout follows a crippling bout of liquidations on Oct. 10 that wiped out US$19 billion in leveraged token bets, and in turn erased roughly US$1.5 trillion from the combined market value of all cryptocurrencies.
The selling pressure has only intensified in the past 24-hours, with a further US$2 billion in leveraged positions liquidated, data from CoinGlass showed.
Institutions appear reluctant to “buy the dip.”
A group of 12 US-listed bitcoin exchange-traded funds saw US$903 million in net outflows on Thursday, their second-largest single-day redemption since debuting in January 2024.
Open interest in perpetual futures has fallen 35 percent from its October peak of US$94 billion.
The broader market backdrop has done little to help. US stocks, which had rallied on renewed enthusiasm for artificial intelligence after upbeat earnings from Nvidia Corp, surrendered gains amid concerns over stretched valuations and doubts about a US Federal Reserve rate cut next month.
“Sentiment across the board is incredibly poor. There appears to be a forced seller in the market and it is unclear how deep this goes,” said Pratik Kala, portfolio manager at Australia-based hedge fund Apollo Crypto.
IG Australia analyst Tony Sycamore said in a note that the market “may also be seeking to test Strategy’s pain threshold” — a reference to the original bitcoin hoarder run by Michael Saylor.
That is significant, as a further slide toward the company’s break-even point would trigger margin calls on its leveraged holdings, he added.
Strategy Inc closed 5 percent lower on Thursday.
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