Bitcoin extended a retreat from its latest record high, amid an intensifying debate about whether the bull run in cryptocurrencies is evidence of speculative froth in global markets.

The largest digital asset dropped as much as 7.2 per cent on Friday (Mar 15) before paring some of the slide to change hands at US$67,725 as of 7.57 am in New York. The token set a fresh all-time peak of almost US$73,798 a day earlier. 

Both this year’s advance in Bitcoin and a gauge of the top 100 tokens – comprising the likes of Ether, BNB and Solana – moderated to roughly 60 per cent.

Bets on looser Federal Reserve monetary policy helped power rallies in global stocks, bonds and crypto in the past few months, but investors are reassessing such wagers following evidence of persistent inflationary pressure in the US.

In a Bloomberg Television interview, Bank of America chief investment strategist Michael Hartnett said markets are showing the characteristics of a bubble in the record-setting surge by the technology sector’s so-called Magnificent Seven stocks and the all-time highs in crypto.

The comments feed into a live debate on Wall Street about whether many markets are vulnerable to a pullback. For Bitcoin, supporters point to about US$12 billion of net inflows into dedicated US exchange-traded funds and an upcoming reduction in the token’s supply growth as fundamental supports.

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A report on Thursday showing a jump in US producer prices stoked worries that the Fed’s campaign to get inflation under control is far from over.

Bitcoin was “undercut by the rise in US yields and the US dollar that followed the hot producer-price inflation data,” Tony Sycamore, a market analyst at IG Australia, wrote in a note.

The token’s stumble came alongside indications of increased circumspection in the derivatives market, which of late has been a lightning rod for bullish fervour.

Coinglass data show US$526 million worth of bullish crypto wagers were liquidated in the past 24 hours – the most in about two weeks. The funding rate or cost for positions in Bitcoin perpetual futures – which are popular with speculators as they have no set expiry – slumped, according to CryptoQuant figures. BLOOMBERG