News: Bitcoin falls back sharply after weekend record.
TOKYO / LONDON (Reuters) – Bitcoin fell sharply on Monday after hitting a record high of $ 61,781.83 over the weekend after U.S. President Joe Biden approved his $ 1.9 trillion fiscal stimulus and ordered vaccinations to be accelerated would have.
Bitcoin’s new high also came when ten-year US Treasury bond yields hit a 13-month high of 1.64% on Friday.
With some investors looking at Bitcoin more as a hedge against inflation, analysts believe Bitcoin’s surge was helped by prospects of a steep economic recovery.
“Since the beginning of 2020, the correlations between Bitcoin and copper, stocks and, in particular, break-even inflation have increased,” wrote William De Vijlder, chief economist at BNP Paribas, in a note examining the drivers behind the rise in the cryotocurrency.
Bitcoin more than doubled in 2021 after quadrupling last year.
In early deals in London, the world’s most popular cryptocurrency briefly fell below $ 55,000 and by 1118 GMT, down 5.2% to $ 55,973.30.
US 10-year yields also fell to 1.61% on Monday morning.
Justin d’Anethan, Hong Kong sales director for digital asset firm Diginex, said Bitcoin’s new record was delivered to thinner markets on Saturday due to the weekend, with technical factors adding to the surge.
“The crypto market is full of derivatives,” he noted.
“A small increase triggered a lot of liquidations on Saturday and Sunday and thus became a not so small step.”
The rally could also have been dampened by a Reuters report that India would pursue a digital asset ban, a rain cloud for Bitcoin, after high-profile recommendations from Tesla’s Elon Musk were released earlier this year. TwitterJack Dorsey and investment giants Goldman Sachs and BlackRock.
Seth Melamed, the Tokyo-based chief operating officer of Cryptocurrency Exchange Liquid, said laws like the ones India is proposing would not hinder further profits for Bitcoin.
“Because it is decentralized, government bans or acceptance are somewhat irrelevant,” Melamed said. “Capital will find a way.”
Reporting by Kevin Buckland and Julien Ponthus; Additional coverage by Sagarika Jaisinghani and Alun John; Editing by Jacqueline Wong and Nick Zieminski
Original Source © Reuters