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Bitcoin falls to lowest level in 16 months, giving up 2021 gains

Bitcoin falls to lowest level in 16 months, giving up 2021 gains

FILE PHOTO: A representation of cryptocurrency Bitcoin is seen in this illustration taken August 6, 2021. REUTERS/Dado Ruvic

HONG KONG: Bitcoin fell to its lowest level in 16 months on Thursday (May 12), leading a rush out of risk assets such as tech stocks, while the collapse of TerraUSD, a so-called stablecoin, underscored the strain on cryptocurrency markets.

The world's largest cryptocurrency dropped as low as US$26,970, to stand at its lowest since Dec 28, 2020. In the last eight sessions, it has lost a third of its value, or US$13,000.

Bitcoin surged in 2021 to reach its all-time high of US$69,000 that November.

Traders say its recent decline mirrors tumbles in tech stocks, as the Nasdaq has lost 6.4 per cent this week.

Another factor at play is the spectacular collapse of TerraUSD, once the world's third-largest stablecoin, which broke its dollar peg this week to fall as low as 30 US cents, causing ructions in the crypto industry.

Market players are still weighing the fallout of its collapse to identify if any major companies or investors have been badly hurt, as a possible clue to wider contagion.

Ether, the world's second-largest cryptocurency, tumbled more than 10 per cent on Thursday to stand as low as US$1,833, its lowest level since July 2021.

Source: Reuters/kg

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