On Friday, the world’s most renowned cryptocurrency, Bitcoin witnessed a 5% decline in its value. Its value fell to $28,800 in the Asia session. The cryptocurrency has seen a 15pc drop in its value so far this week. It is the highest drop since a 33pc fall in March 2020.
Bitcoin Witnesses a Sharp Decline in its Value first time since March 2020
Kyle Rodda, an analyst at IG Markets in Melbourne said,
You wouldn’t want to rationalise too much into a market that’s as inefficient and immature as bitcoin, but certainly there’s a reversal in momentum. The herd has probably looked at this and thought it sounded scary and shocking and it’s now the time to sell.
Right now, the value of Bitcoin is now around 30pc less than the record high of $42,000 it hit a couple of weeks ago. It has lost grounds due to the growing concerns that it is one of a number of financial market price bubbles and as cryptocurrencies attract the regulators’ attention.
According to a report, the part of a bitcoin may have been spent two times which has hurt confidence in the technology underlying the asset class.
President Joe Biden’s pick to head the US Treasury, Janet Yellen, during a US Senate hearing showed concerns that cryptocurrencies like bitcoins could be utilized to finance illegal activities. This was followed by a call last week from European Central Bank President Christine Lagarde for the global regulation of the cryptocurrency.
Michael McCarthy, strategist at brokerage CMC Markets in Sydney said,
It’s a highly volatile piece. It made extraordinary gains and it’s doing what bitcoin does and swinging around.