Bitcoin slides below US$30,000 for first time in a month

Hong Kong

A SELL-OFF in Bitcoin accelerated on Tuesday, pushing it below US$30,000 for the first time in about a month.

The largest digital coin fell as much as 4.1 per cent and was trading at about US$29,700 as of 7am in London. Other virtual currencies also retreated, including second-ranked Ether. The Bloomberg Galaxy Crypto Index was down about 4 per cent.

Some traders had viewed US$30,000 as a key support that might open the way to more losses if breached. Further big declines from here could rattle the cryptocurrency market and even exacerbate a wider flight from risk assets such as stocks. Global equities are falling due to fears of slowing economic growth and the relentless spread of the Delta variant of Covid-19.

"We're going to need to form another base first before resuming another bull trend," said Vijay Ayyar, head of Asia-Pacific with cryptocurrency exchange Luno in Singapore. "We are going to be ranging between US$20,000 and US$40,000 for the rest of the year."

Narratives that had propelled Bitcoin to a mid-April record of almost US$65,000 are now being questioned. Some had argued the digital asset could act as a hedge against inflation due to its limited supply. But Bitcoin's 2 per cent advance this year lags behind the S&P 500's 13 per cent advance.

"Investors who are allocating to crypto know that volatility is going to be part of it," Grayscale Investments CEO Michael Sonnenshein told Bloom-berg TV.

Bitcoin has been hit by many setbacks of late, including China's regulatory crackdown - partly over concerns about high energy consumption - and progress in central bank digital currency projects that could squeeze private coins.

The creator of meme-token Dogecoin recently lambasted crypto as basically a sham, and the appetite for speculation is generally in retreat. BLOOMBERG