Bitcoin down 8% from last week’s year high, steadies near $42k
ALBAWABA – Bitcoin on Tuesday pared some of its losses from yesterday’s turbulent fall, following three days of decline, Saturday through Monday, marking the worst three-day stretch for the world’s largest cryptocurrency since mid-August.
Bitcoin lost 8 percent of its value overall in the last three days, having hit a high of $45,000 last week and steadied just over $44,000 Wednesday through Friday, up 152 percent year-to-date.
Bloomberg’s observers blamed edgy speculators paring positions ahead of the Federal Reserve’s (Fed) monetary policy meeting, Tuesday through Wednesday.
Speculations on whether the Fed will hike or pin US interest rates for December caused ripples throughout various markets.
Bitcoin rallied 152 percent year-to-date last week - Shutterstock
Upcoming US inflation data, namely the Consumer Prices Index (CPI), coming out later on Tuesday, will give further pointers as to the trajectory of future US interest rates, inflation and the overall economy.
The US dollar dropped around 0.2 percent, with the Bloomberg dollar index spot down 0.18 percent on Tuesday, treasuries were all in the green, as the 10-year Treasury yield stood at 4.2 percent.
Stocks worldwide were also tracking US Wall Street gains, mostly up on anticipations of Fed rates and upcoming China stimulus.
Paradoxically, silver and gold prices were also in the green, posting gains against a weaker US dollar and expectations of the Fed pinning interest rates in December.
Stocks worldwide, gold prices up as bitcoin pares some of its losses
Bitcoin traded near $42,000 on Tuesday, according to Bloomberg, as investors look to the first US spot Bitcoin exchange-traded funds (ETFs), to be approved soon.
This may herald greater demand for the cryptocurrency.
The crypto industry is awaiting the outcome of applications from BlackRock Inc. and others to start US spot Bitcoin ETFs. Bloomberg Intelligence expects a batch of funds to get Securities & Exchange Commission approvals by next month.
The Bitcoin halving even, due in 2024, which will cut in half the amount of tokens miners can receive as reward for their work also propped bitcoin prices.
Bitcoin rallied after each of the last three halving events - Shutterstock
The quadrennial event is part of the process of capping Bitcoin supply at 21 million tokens.
Historically, the cryptocurrency hit record highs after the last three halvings, according to Bloomberg.
Yet, Bloomberg reported Coinglass data showing about $455 million worth of crypto trading positions for higher prices being liquidated on December 11, the highest tally since at least mid-September.
This mass exodus of funds was driven by traders cashing in on their profits from last week’s surge and has undermined the cryptocurrency’s rally.
Bitcoin climbed about 1 percent on Tuesday, to $41,737 as of 0907 in Singapore on Tuesday, Bloomberg reported, while smaller tokens like BNB and Avalanche also pushed higher. Overall, a gauge of the top 100 crypto coins posted a modest advance.
