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Cryptocurrencies no refuge in market carnage as bitcoin slumps to US$8,000
- Other major digital currencies – ether, XRP and litecoin – also retreated on Monday
- Even with the latest sell-off, bitcoin is still up 12 per cent this year
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Cryptocurrencies are not immune to the gyrations rocking global markets, plunging along with a broad range of assets on Monday in the wake of the collapse in crude oil prices.
Bitcoin, the largest digital currency, dropped as much as 12 per cent from Friday’s close after extending a sell-off begun over the weekend, and was trading just above US$8,000 as of 11:44am in Hong Kong. That was the biggest one-day slump since September, according to consolidated pricing compiled by Bloomberg.
The wider Bloomberg Galaxy Crypto Index fell as much as 16 per cent as other major digital currencies – ether, XRP and litecoin – also retreated.
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Asia equities plunged with sovereign bond yields, while currencies swung wildly on Monday after Brent oil prices crashed more than 30 per cent, the second-largest decline on record after the plunge during the Gulf War in 1991.
“Macro dominoes are falling to create a chain of negative sentiment, which is in turn triggering a sell-off of crypto,” said Jehan Chu, managing partner with blockchain investment and advisory firm Kenetic Capital. “Bitcoin has always been subject to short-term sometimes-violent volatility, but today’s drop is nothing we haven’t seen before” and it could move lower still, he said.
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