Bitcoin hit a fresh two-month low on Friday, breaking out of its recent tight range, as a wave of risk off sentiment grips world markets.
On Thursday, bitcoin fell 7.2% in its biggest one-day drop since November 2022 when top exchange FTX collapsed.
It then slipped to a two-month low of US$26 172 during Asian trading hours on Friday, its lowest since 16 June. By 9.13am SAST, it had partly recovered to $26 478, down 0.6% on the day.
Global markets have been hit by a wave of selling, with Wall Street’s main indices closing lower on Thursday and Asian shares heading for a third week of losses over concerns about China’s economy and fears that US interest rates would stay higher for longer given a resilient economy.
Ether, the second biggest cryptocurrency, was steady at $1 690.20, having also dropped sharply on Thursday.
Joseph Edwards, head of research at Enigma Securities, attributed the bitcoin price move to low volatility and a lack of enthusiasm from retail investors.
Bitcoin had been hovering close to $30 000 in recent months. It was lifted in June by BlackRock applying to launch a spot bitcoin exchange-traded fund (ETF) in the US.
Bitcoin
Some investors interpreted that move as an indication that the US Securities and Exchange Commission would approve spot bitcoin ETF applications from various asset managers, including Grayscale.
“The big concern right now is that this might be a front-run on the outcome of Grayscale’s lawsuit against the SEC; optimism on that front has been keeping markets inflated above whether they might otherwise be for much of the [northern hemisphere] summer,” Edwards said. — Elizabeth Howcroft, (c) 2023 Reuters