Yahoo Finance Bitcoin and ethereum plunge as investors cut down on risky bets
Major crypto currencies ended the week on a sour note as jittery investors turned wary.
Bitcoin (BTC-USD) was down 4% to trade at $47,376 (£35,657). It was about 30% down from its all-time high of $69,000, which it hit last month, and struggling to cross a key level of $50,000.
Ethereum (ETH-USD), the second biggest crypto by market cap, slumped more than 6% and was trading at $3,825.
Earlier Coindesk had reported that bitcoin continues to hold support above $46,000, which is near its 200-day moving average. It forecast the cryptocurrency could see a brief price bounce toward $55,000 if buyers react to oversold signals on the charts.
“Bitcoin, ethereum, cardano (ADA-USD), ripple (XRP-USD), dogecoin (DOGE-USD) and shiba inu (SHIB-USD), and a bunch of other leading crypto assets plunged between 2% to 6% in the early deals on Friday as investors continue to downsize the proportion of risky bets” on their portfolio, Kunal Sawhney, CEO, Kalkine Group told Yahoo Finance UK.
He said given heightened uncertainty in markets with the leading stock averages witnessing back-to-back drops, the optimism around tech stocks, cryptocurrencies and other volatile assets appears to have decreased.
Read more: Live crypto prices
This comes as countries continue to report a large number of COVID cases with the new Omicron variant spreading.
Sawhney said he expects markets to remain choppy for the rest of 2021 although he said cryptocurrencies could “see a considerable upsurge in the terminal days of this month.”
Some analysts had earlier predicted that bitcoin would hit $100,000 by the end of the year, but this is looking more and more unlikely.
Meanwhile, regulation remains a challenge for countries around the world figuring out how to govern the industry. El Salvador has begun accepting bitcoin as legal tender but countries like China have cracked down on cryptos.
Recently, International Monetary Fund chief economist Gita Gopinath said there was a need for a global policy on the issue as "there are challenges to banning it... whether you can end up with truly banning crypto because many exchanges are offshore and they are not subject to regulations of a particular country".
This comes as cryptos continue to retain staunch supporters. Former chairman of the US Securities and Exchange Commission, Jay Clayton, said he is a "huge believer" in crypto technology, adding: "The efficiency benefits in the financial system and otherwise from tokenization are immense."
