Bitcoin set for worst week since March as riskier assets sold off

Bitcoin set for worst week since March as riskier assets sold off

Bitcoin was headed on Friday for its worst week since March as a rout in global bond markets sent yields flying and sparked a sell-off in riskier assets.

FILE PHOTO: A representation of virtual currency Bitcoin
FILE PHOTO: A representation of virtual currency Bitcoin is seen in this illustration taken November 19, 2020. REUTERS/Dado Ruvic/Illustration

LONDON: Bitcoin was headed on Friday for its worst week since March as a rout in global bond markets sent yields flying and sparked a sell-off in riskier assets.

The world's biggest cryptocurrency slipped as much as 6per cent to US$44,451 before recovering most of its losses.

It was last trading down 1per cent at US$46,671, on course for a drop of almost 20per cent this week, which would be its heaviest weekly loss since March last year, when fears over the novel coronavirus caused havoc in financial markets.

The sell-off echoed that in equity markets, where European stocks tumbled as much as 1.5per cent, with concerns over lofty valuations also hammering demand. Asian stocks fell by the most in nine months.

"When flight to safety mode is on, it is the riskier investments that get pulled first," Denis Vinokourov of London-based cryptocurrency exchange BeQuant wrote in a note.

Bitcoin has risen about 60per cent from the start of the year, hitting an all-time high of US$58,354 this month as mainstream companies such as Tesla Inc and Mastercard Inc embraced cryptocurrencies.

Grayscale's Bitcoin Trust, which has seen huge inflows amid the heightened interest in cryptocurrencies and manages almost US$33 billion in assets, was down 5.5per cent versus its previous close at US$45.63.

The Purpose Bitcoin ETF, which became this month the world's first exchange traded fund physically settled by bitcoin, last traded at US$7.41 versus a net asset value of US$9.36.

Its stunning gains in recent months have led to concerns from investment banks over sky-high valuations and calls from governments and financial regulators for tighter regulation.

(Reporting by Ritvik Carvalho and Tom Wilson; editing by Dhara Ranasinghe, Karin Strohecker, William Maclean)

Source: Reuters

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