TOKYO: Bitcoin regained some ground today from the previous session’s brutal slide to four-month lows but was weighed down by concerns over tighter regulation in China and unease over the extent of leveraged positions in the cryptocurrency world.
Bitcoin, the biggest and most popular cryptocurrency, rose 8.75% to touch US$40,000 (RM165,000), after plunging 14% on Wednesday to its lowest since late January.
Smaller rival ether was up 6.6% at US$2,600 at 0630 GMT, but in extremely volatile trading after its 28% tumble on Wednesday.
Wednesday’s declines in both digital assets were their biggest daily percentage moves in more than a year as investors rushed to exit trades that until recently were heartily outperforming traditional markets such as stocks and bonds.
The latest catalyst was a statement by Chinese financial industry groups on Tuesday banning institutions from offering cryptocurrency registration, trading, clearing, and settlement.
But bitcoin had been under pressure for almost a week after a series of tweets from carmaker Tesla’s chief Elon Musk, a major cryptocurrency backer, chiefly his reversal on Tesla accepting bitcoin as payment.
While Beijing has taken steps before to block access domestically to cryptocurrency exchanges, its latest directive was broader.
It bans the use of cryptocurrencies in payment and settlement, and prohibits institutions from providing crypto-related products or exchange services between cryptocurrencies and the yuan or foreign currencies.
Bitcoin may fall a little further but is likely to stabilise around US$30,000, said Justin d’Anethan, head of exchange sales at Diginex, a Singapore-based digital asset market.
Digital assets have been on a wild ride this year as a growing number of retail and institutional investors bet that bitcoin and other crypto currencies will gain mainstream acceptance, but large price swings are common.
Major crypto backers such as MicroStrategy Inc’s CEO Michael Saylor, Ark Invest’s CEO Cathie Wood and Musk indicated their support for bitcoin as it plunged on Wednesday.
While some retail traders saw missed opportunities in the slide, others saw the rout as a chance to pick up digital assets on the cheap. – Reuters
