Bitcoin Slides 6%, While Altcoins Sparkle

Reuters | March 19, 2024

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By Hannah Lang, Amanda Cooper and Rae Wee

WASHINGTON/LONDON/SINGAPORE (Reuters) -Bitcoin fell by as much as 6.5% on Tuesday, on track for its largest one-day drop in two weeks, as a wave of selling hit cryptocurrencies and other risk assets, such as stocks.

The price was last down 5.86% at $63,419, having dropped to a two-week low of $62,966, while ether fell 6.39% to $3,283.

Bitcoin is still showing a 52% gain for the year so far, as investors have piled into U.S. exchange-traded funds backed by spot bitcoin.

The price hit a record high of nearly $74,000 on Thursday last week, which has triggered some profit-taking, along with a series of U.S. data releases that suggested the Federal Reserve may not cut interest rates this year as much as previously thought.

In the last week, bitcoin has fallen by nearly 9%, set for its largest week-on-week decline since last September, while ether has lost 13% following an upgrade to the underlying ethereum network.

But performance has not been as weak across the broader crypto complex.

On Monday, crypto firm Galaxy Digital’s affiliate, Galaxy Asset Management, reported preliminary assets under management of $10.1 billion as of the end of February — a 24.8% increase compared to the previous month, driven primarily by market appreciation, the company said.

Smaller tokens, known also as “altcoins”, have drawn in flows of their own. The solana network’s sol token has gained 19% in the latest week, while avalanche’s avax coin has risen by 17%, according to Coingecko.

“In light of bitcoin’s recent all-time high and subsequent correction, we anticipate a period of market recalibration as investors seek equilibrium amidst unprecedented inflows into spot bitcoin ETFs,” analysts at exchange Bitfinex said in a note.

Coins linked to AI-focused crypto projects have also jumped alongside tech stocks like Nvidia, driven by insatiable investor appetite for applications like machine-learning.

Shares of Coinbase on Tuesday slid 5.2%, while crypto miners Riot Platforms and Marathon Digital fell 3.7% and 4.2%, respectively.

Shares in software firm and bitcoin buyer MicroStrategy dropped more than 11%.

On Tuesday, MicroStrategy disclosed that it had purchased 9,245 bitcoins as of Monday for $623 million, using proceeds from a recent convertible offering that raised about $600 million.

Flows of capital into the 10 largest bitcoin ETFs have also slowed over the past few days.

According to LSEG data, $178 billion flowed into the major ETFs on Monday, compared with well over $400 billion on a number of days last week.

(Additional reporting by Shubham Batra in Bangalore; Editing by Harry Robertson, Christina Fincher and Louise Heavens)