- Bitcoin and other digital coins fired on Monday, wiping out about $ 150 billion from the entire cryptocurrency market.
- Bitcoin, the largest cryptocurrency, fell over 10% from a day earlier to $ 34,200, according to Coin Metrics data.
- The sale in cryptocurrencies comes after a huge rally and may be indicative of some return from investors.
GUANGZHOU, China – Bitcoin and other digital coins were fired on Monday, wiping some $ 150 billion off the cryptocurrency market.
The cryptocurrency market’s market capitalization or value was $ 931 billion around 6:00 pm ET, down from $ 1.08 trillion a day earlier, according to Coinmarketcap.
Bitcoin, the largest cryptocurrency, fell over 10% from a day earlier to $ 34,200, according to Coin Metrics data. It sank earlier to a minimum intraday of $ 30,863. Ether, the second-largest cryptocurrency, was down 15% to $ 1,060. It fell briefly below $ 1,000, hitting an intraday low of $ 945.
The sale in cryptocurrencies comes after a huge rally and may be indicative of some return from investors. Bitcoin is still up over 300% in the last 12 months and last week it always hit a peak just below $ 42,000.
“The correction we saw was expected as we believe BTC’s recent price surge of less than $ 20,000 to $ 40,000 in the past four weeks will trigger sales pressure,” said Simons Chen, executive director of investment and trading at the company cryptocurrency financial services, Babel Finance.
The $ 40,000 mark could have been a catalyst for profit-taking, Chen said.
Bitcoin’s resurgence was attributed to a number of factors including buying more from large institutional investors.
And it’s also been compared to “digital gold,” a potential safe haven asset and a hedge against inflation. In a recent research note, JPMorgan said bitcoin could hit $ 146,000 in the long run as it competes with gold as an “alternative” currency. The investment bank’s strategists noted, however, that to reach this price, bitcoin would have to become significantly less volatile. Bitcoin is known for wild price swings.
But some bitcoin critics – like David Rosenberg, an economist and strategist at Rosenberg Research – have called bitcoin a bubble.
However, long-term bullish around bitcoin remains.
Jehan Chu, founder of venture capital and cryptocurrency-focused trading firm Kenetic Capital, said the downside in bitcoin could be a buying opportunity for new investors.
“This short-term correction is natural and needed, and is a great entry point for long-term investors as we reach $ 50k quickly this quarter and $ 100k by the end of the year,” Chu told CNBC .
Last week, Chamath Palihapitiya Social Capital said bitcoin could go above six digits.
“It’s probably going to $ 100,000, then $ 150,000, then $ 200,000,” Palihapitiya told CNBC’s “Halftime Report.” “At what time? I don’t know. [Maybe] five or 10 years, but it goes there. “