(Bloomberg) — Bitcoin extended its retreat from all-time highs as debate rages over whether the cryptocurrency’s bull run is evidence of frothy speculation in global markets.
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The largest digital asset fell as much as 5.6% in Asian trading on Friday, but pared some of its losses to $67,300 as of 1:43pm in Singapore. The token hit a new all-time high of around $73,798 the previous day.
Bitcoin's rise this year and the index for the top 100 tokens, which are made up of Ether, BNB, Solana, etc., were both limited to around 60%.
The Federal Reserve's bet on accommodative monetary policy has driven gains in global stocks, bonds and cryptocurrencies over the past few months, as the US showed sustained inflationary pressures. Investors are reevaluating these bets.
Difficulty ahead?
In an interview on Bloomberg TV, Michael Hartnett, chief investment strategist at Bank of America, said the market is in a bubble, driven by record highs in the tech sector's so-called Magnificent Seven stocks and cryptocurrencies. He said that it shows the characteristics of
These comments spark a lively debate on Wall Street about whether many markets are vulnerable to a pullback. For Bitcoin, proponents point to the roughly $12 billion in net inflows into U.S. exchange-traded funds (ETFs) and future declines in Bitcoin supply growth as fundamental support.
Thursday's report showing rising U.S. producer prices raised concerns that the Fed's efforts to rein in inflation are far from over.
Tony Sycamore, a market analyst at IG Australia, said in a note that Bitcoin “fell as US yields and the US dollar rose on the back of strong producer price inflation data.”
The token’s stumble occurred alongside signs of growing caution in derivatives markets, which have recently become a bullish lightning rod.
According to Coinglass data, $526 million worth of bullish crypto bets were liquidated in the past 24 hours, the most in nearly two weeks. The funding rate or cost of Bitcoin perpetual futures positions, which are popular with speculators because they have no set expiry date, have slumped, according to CryptoQuant statistics.
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