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Bitcoin, ether slump as market selloff widens

Bitcoin, ether slump as market selloff widens

FILE PHOTO: Representations of cryptocurrencies Bitcoin, Ethereum, DogeCoin, Ripple, Litecoin are placed on PC motherboard in this illustration taken, June 29, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

NEW YORK/LONDON :Cryptocurrency prices sank on Monday as concerns over the spillover risk to the global economy from Chinese property group Evergrande's troubles spread across financial markets.

Bitcoin, the world's biggest and best-known cryptocurrency, tumbled to US$42,453.97, its lowest level since Aug. 7 before trimming some losses to trade down 7.4per cent at US$43,745. It hit a near four-month high above US$52,000 on Sept. 6.

Smaller rival ether, the coin linked to the Ethereum blockchain network, fell more than 10per cent below US$3,000 for the first time since early August. It was last down 7.6per cent at US$3,071.

Market capitalization of the cryptocurrency market dropped 10per cent on Monday to under US$1.94 trillion, from last Saturday's US$2.17 trillion.

The loss in the value of cryptocurrencies comes at a time when institutional interest in the space has surged and some investment banks have ramped up their forecasts for cryptocurrencies in the coming months.

"It's red, red, red across the board today as the cryptocurrency markets follow the downturn being seen in traditional markets as China battles a highly-contagious property market crisis," said Tim Frost, chief executive officer at Yield App, a financial technology company that enables users to invest in decentralized finance.

"Bitcoin has lost support at the US$44,000 mark and looks set to test its US$39,000 floor. If it falls through here we can expect a significant correction to come," he added.

Bitcoin shorts in the futures markets have increased to 1,187 contracts, the largest since early August, according to data from the Commodity Futures Trading Commission released Friday.

(Reporting by Gertrude Chavez-Dreyfuss in New York and Saikat Chatterjee in London; Editing by Ritvik Carvalho and Chris Reese)

Source: Reuters

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