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BITCOIN flopped in trading on Monday as the famous volatile cryptocurrency fell back after a spectacular rally.
Prices plunged as much as 17% in the biggest intraday pullback since March, wiping out gains made over the weekend. After a parabolic 2020, the digital currency had started the new year with a bang, climbing as high as $ 34,000 and hitting all-time highs.
As always in the world of cryptocurrencies, it is difficult to pin down the immediate cause of the latest episode of volatility. Still, Bitcoin has risen over 300% over the past year, fueled by a speculative fever from retail and institutional investors in the belief that cryptocurrencies are emerging as a mainstream asset class and can act as a store of value.
Believers in Bitcoin have pointed to market supply constraints and supposedly rampant printing of money by central banks as key drivers of the bullish narrative. Others say cryptocurrencies are a budding bubble and another sign that crazy risk-taking has taken over global markets.
Bitcoin was down 13% to $ 29,168 at 10:41 am in London. – Bloomberg
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