Bitcoin, the largest virtual coin by market capitalization, tumbled as much as 9.2% to $21,271, the biggest intraday drop since June 18. Ether and smaller tokens saw even sharper declines, with Avalanche, Cardano and Solana falling more than 10%.
A big chunk of the day’s losses came all at once during Asia trading, when Bitcoin lost almost 5% of its value versus the dollar in roughly a minute just before 2:45 p.m. Singapore time. Such mini-crashes are rare but not unheard of in online currencies, where futures transactions often dominate price action and are subject to near-instantaneous liquidations by automated engines.
“Bitcoin is a speculative asset and speculative assets don’t do well during tightening regimes, when the central bank is tightening and liquidity is becoming more scarce,” Jose Torres, senior economist at Interactive Brokers, said in an interview. “It does not surprise me that Bitcoin has erased a lot of its gains from recently reaching $25,000.”
Cryptocurrency prices have fallen sharply since May, when the collapse of stablecoin project Terra set off a wave of liquidations, bankruptcies and layoffs in the sector. Bitcoin’s price has rebounded since hitting a low of $17,599 on June 18, but remains down 54% this year.
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