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Bitcoin stabilises after week of bungee-cord prices

Published: (Updated: ) in Australian News by .

The cryptocurrency market has stabilised overnight, with bitcoin climbing back above US$40,000 ($51,000).

The cryptocurrency market has stabilised overnight, with Bitcoin climbing back above US$40,000 ($51,000).

Even so, the world's largest digital currency has lost more than 30 per cent in market capitalisation since its peak in mid-April.

The wider crypto market looks similarly bruised.

READ MORE: Why has Bitcoin been plunging?

Cryptocurrencies like Bitcoin and Ethereum have had a helter-skelter week.

Several digital currencies are still showing double-digit percentage losses from where they were before the latest turmoil.

And all the crypto bloodletting points to a big warning: invest at your own risk.

Since May 12, the global cryptocurrency sector has lost more than 30 per cent of its total market value, according to data from CoinMarketCap.

By this morning, the world crypto market value had fallen to nearly $2.3 trillion, down from more than $3.2 trillion just last week.

This week's steep selloff came on the heels of China cracking down on cryptos.

In response, Bitcoin tumbled to just above $38,700 as digital currencies across the board sold off.

READ MORE: Elon Musk's one-word tweet sends Bitcoin into nosedive

But investors shouldn't be surprised about the volatility, William Quigley, managing director at crypto-focused investment fund Magnetic said on the CNN Business digital live show Markets Now.

Cryptos are still a relatively new asset, Mr Quigley noted, and are therefore far less predictable than more traditional investments.

"Keep in mind as well, we all tend to focus on day-by-day, week-by-week. But that's not how most people buy cryptocurrencies, or even stocks," Mr Quigley said.

Meanwhile, Ethereum co-creator Vitalik Buterin told CNN Business that he believes cryptos are in a bubble.

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And it's hard to tell when bubbles will burst.

Then again, the momentum could keep building: Since the start of the year, Ethereum and joke-turned-crypto Dogecoin have increased in value nearly 290 per cent and more than 8000 per cent respectively — even after accounting for the recent rout.

Bitcoin is up more than 40 per cent in that time frame, according to Coindesk data.

READ MORE: 'Diamond hands': Elon Musk holding steady as Bitcoin plunges

Cryptocurrencies including Bitcoin and Ethereum have boomed in the past 12 months.

Ups and downs

Bubble or not, the crypto landscape looked to be on the road to recovery today.

"The bigger the drop, the higher the bounce," Fawad Razaqzada, market analyst at ThinkMarkets, said in a note.

Bitcoin is up some 18 per cent and was at more than $54,000 today.

Ethereum rose 22 per cent to around $3700.

"But it remains to be seen whether the recovery will hold," Mr Razaqzada added.

"Cryptos will likely stay volatile for a while as speculators weigh the impact of China's ban and Tesla's U-turn against the recent growth in institutional interest."

Tesla, which in February announced a $1.9 billion investment in bitcoin and said customers could use it to pay for its cars, walked back the latter decision last week, citing the environmental impact of bitcoin mining.

Strategists at JPMorgan said earlier this week that institutional investors are pivoting out of cryptos and back into gold, although it wasn't yet clear why.

READ MORE: Bitcoin plunges below $40,000 as China widens its crypto crackdown

Source: 9News https://www.9news.com.au/world/bitcoin-market-price-ethereum-cryptocurrency-prices-dogecoin-crypto-finance-news/4a814acc-85fd-4272-9513-ae664adb8acc

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