While many analysts thought the explosion in crypto interest this year was not sustainable, the trigger for the shake-out was China's move on Tuesday to ban financial and payment institutions from providing cryptocurrency services. It also warned investors against speculative crypto trading.
In other markets, a move into safe-haven U. Treasury securities initially knocked yields lower, although yields rose after the release of minutes of the Federal Reserve's latest meeting, while U.
Federal Reserve officials played down any risk to the wider financial system. Louis Federal Reserve president James Bullard said.
Inside The Cryptocurrency Revolution
Cryptocurrency price declines last week were sparked by Musk's reversal on Tesla accepting bitcoin as payment, citing the heavy environmental toll of "mining" bitcoin, which requires a lot of electricity to power the computers that create bitcoin. But would it have recovered nicely?
Tesla shares fell 2. Amid the volatility, cryptocurrency trading platforms Coinbase and Binance said they were investigating or experiencing some service issues.
Shares in Bitcoin mining market dropped 5. Technical factors were also said to be at play as bitcoin appeared to accelerate once it fell below its day moving average, a chart position which traders follow.
Investors could also be exiting bitcoin for gold, analysts at JPMorgan said, citing data on open interest in CME bitcoin futures contracts. That the crypto asset is tumbling at a time when inflation fears are rising undermines the case for investing in the asset class to hedge against inflation, analysts said.
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