in

Bitcoin slumps 6 per cent as new COVID-19 variant upsets wider markets

Bitcoin slumps 6 per cent as new COVID-19 variant upsets wider markets

Bitcoin dropped as much as 6% on Monday, with fears over a fast-spreading new coronavirus strain in Britain hitting assets across wider markets.

The cryptocurrency was last down 5.5% at $22,156 after hitting a record $24,298.04 on Sunday.

European shares fell 3%, the dollar strengthened and market volatility surged amid growing unease over the economic impact of the new strain of the virus, which has seen several European countries shut their borders to the U.K.

Story continues below advertisement

Bitcoin’s relationship with traditional assets is inconsistent, with the cryptocurrency’s recent history punctuated by periods of both correlation and dislocation with wider market moves.

Smaller coins like ethereum and XRP, which usually trade in tandem with bitcoin, fell 5.9% and 9.2% respectively.

Bitcoin passed the $20,000 milestone for the first time last week, and is up more than 210% this year, amid surging interest from larger investors who variously see the cryptocurrency as a hedge against the threat of inflation, a risk-on asset, and a future payment method.

Analysts at JPMorgan said in a note on Friday that recent moves by traditional investors such as insurance companies to buy bitcoin had sparked speculative buying.

“We find it difficult not to characterize bitcoin as overbought at the moment,” they added.

Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.

Published at Mon, 21 Dec 2020 13:13:06 +0000

What do you think?

Written by Riel Roussopoulos

Comments

Leave a Reply

Your email address will not be published.

Loading…

0

Amigo Loans: Bid for survival with plan to cap compensation

Scientists get the most realistic view yet of a coronavirus spike’s protein structure