Bitcoin is under severe pressure
Bitcoin slid on Monday amid a fraying appetite for riskier investments and an intensifying cryptocurrency crackdown in China.
The largest virtual currency fell as much as 9% to US$32 605 and was trading a little under $33 000 as of 7.40 am in London. Ether, the second biggest token, declined as much as 11%.
The selloff came amid a broader retreat in assets like stocks and commodities in the wake of last week’s hawkish policy pivot by the US Federal Reserve. Bitcoin was already under pressure over the weekend after a Chinese city was said to have begun a sweeping clampdown on crypto mining firms, just the latest step by officials in the world’s second-largest economy to rein in the industry.
“If, as I expect, the global buy-everything unwind continues this week, bitcoin will feel those chill winds as well,” said Jeffrey Halley, senior market analyst at Oanda Asia-Pacific.
A government official in China’s Ya’an told at least one bitcoin miner that the city has promised to root out all bitcoin and ether mining operations within a year, said a person with knowledge of the situation.
Some commentators have said China’s hashrate — the computational power used to mine coins and process blockchain transacations — is waning amid harsher regulatory oversight, rattling investors.
The crypto faithful are also grappling with a tumble in tokens used in so-called decentralised finance — or DeFi — applications. DeFi apps let people lend, borrow, trade, and take out insurance directly from each other using blockchain technology, without the use of intermediaries such as banks.
For instance, the Defi Titanium token went from being valued at around $60 to $0 — a rare occurrence even for famously volatile crypto markets. Famed mogul Mark Cuban had invested, saying earlier that though it represented a small percentage of his crypto portfolio, the wipe-out “was enough that I wasn’t happy about it”.
Bitcoin has been in a range between about $30 000 and $40 000 since last month’s collapse. The total market value of more than 8 000 coins tracked by CoinGecko is now at $1.5-trillion, down from a peak of about $2.6-trillion.