Prices sank as much as 17% in the biggest intraday retreat since March, wiping out gains made over the weekend. After a parabolic 2020, the digital currency had started the new year with a bang, surging as high as $34,000 and hitting all-time highs.
As ever in the world of crypto, itâ€™s hard to pinpoint the proximate cause for the latest bout of volatility. Still, Bitcoin is up more than 300% over the past year, driven by a speculative fever from retail and institutional investors on the belief that cryptocurrencies are emerging as a mainstream asset class and can act as a store of value.
Believers in Bitcoin have pointed to the marketâ€™s supply constraints and supposedly rampant money printing by central banks as key drivers of bullish narrative. Others say that cryptocurrencies are a bubble in the making and another sign that crazy risk taking has taken over global markets.
Bitcoin was down 13% to $29,168 as of 10:41 a.m. in London.
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