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Bitcoin retreats 20% from all-time high set earlier in November

Bulls believe more institutions and retail investors will embrace virtual currencies.
Image: Christophe Morin/Bloomberg
Bitcoin tumbled 20% from record highs notched earlier this month as a new variant of the coronavirus spurred traders to dump risk assets across the globe.The world’s largest token fell as much as 7.5% to $54,430.35 in Friday trading in London. Ether, the second largest digital currency, dropped 9%, while the wider Bloomberg Galaxy Crypto Index dropped 4%.

A new variant identified in Southern Africa spurred liquidations across markets with European stocks falling the most since July while emerging markets slumped.

Read: Numerous countries stop flights from SA over Covid variant worries

Bitcoin itself has been under pressure since reaching a record high of almost $69,000 earlier this month on enthusiasm over the first U.S. exchange-traded fund linked to futures on the digital asset.

Coming into this week, analysts have cited a number of crypto obstacles including U.S. tax-reporting requirements for digital currencies and China’s intensifying regulatory clampdown. Now, the prospect of a new virus strain risks undercutting liquidity and risk appetite for the speculative sector.

As ever, bulls remain committed to the view that more institutions and retail investors will embrace virtual currencies.

For now Bitcoin’s pullback is a sideshow to the global market declines on the new variant identified as B.1.1.529 as policy makers rush to retool cross-border travel policies.

The largest token is still up more than 85% this year.

Read: Bitcoin’s Taproot upgrade a prelude to next move up

© 2021 Bloomberg L.P.

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