Sunday, January 17, 2021
Business

Bitcoin falls more than 19% to face biggest one-day drop since March

Bitcoin
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plunged more than 19 per cent to a one-week low on Monday, putting the on track for its biggest one-day drop since March as its recent red-hot rally hit the buffers.


and other digital coins tanked on Monday, wiping some $200 billion off the market.



slumped $30,699, its lowest since January 5, after extending earlier losses in Asian trading hours and was last down 15 per cent at $32,675.


If sustained, the one-day drop would be the biggest since Covid-19 caused chaos in financial in March.


The falls reflect a wider dollar bounce against major fiat currencies as the prospect of higher US interest rates tempers popular bets against the dollar.


Second-biggest ethereum which often moves in tandem with bitcoin, fell as much as 23 per cent to a one-week low of $985.


Interest in bitcoin has been soaring as institutional investors began buying heavily, viewing it as both an inflation hedge and as exposed to gains if it became more widely adopted.


The cryptocurrency more than doubled in price from early December to a record $42,000 on Friday, leading some investment banks to warn of an impending bubble.


BofA said last week the world’s popular cryptocurrency “blows the doors off prior bubbles”, such as the dotcom boom, China in the 2000s and gold in the 1970s.


JP Morgan strategists, however, said that bitcoin has emerged as a rival to gold and could trade as high as $146,000 if it becomes established as a safe-haven asset.


Crypto investors ‘should be prepared to lose all their money,’ UK regulator warns


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The UK’s financial watchdog has a stark warning for consumers looking to profit from the latest crypto boom: be ready to lose everything.


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“Investing in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investors’ money,” the Financial Conduct Authority said in a statement Monday. “If consumers invest in these types of product, they should be prepared to lose all their money.”


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The FCA’s concerns include price volatility, the complexity of products offered and the lack of consumer protection regulation around many of the products.


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The price of Bitcoin, the largest cryptocurrency, has more than quadrupled in the past year, evok­ing memories of the 2017 mania that first made cryptocurrencies a hous­ehold name before prices collap­sed just as quickly. Bloomberg


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