Bitcoin briefly dropped below $38,000 on Monday, its lowest price in a week, as global markets tumbled on concerns that spiraling commodities prices unleashed by Russia’s invasion of Ukraine could have a wider and longer-lasting impact than previously thought.
The largest cryptocurrency recovered slightly and was last trading 0.3% down at $39,045.
Ether, the coin linked to the ethereum blockchain and the second-largest cryptocurrency in terms of market capitalization, declined 1.4% to $2,606. On the other hand, dogecoin price also tanked 2.2% at $0.120728 whereas Shiba Inu was down 2.4% to $0.00002346.
Leading altcoins lower, Polkadot and Solana were mixed over the last 24 hours, according to data from CoinGecko.
Bitcoin has now given up all of the gains it notched up early last week, and is again trading broadly in line with other risk assets. Monday’s losses came as oil soared on concerns the US and its allies might prohibit Russian oil imports, putting more upward pressure on already elevated inflation.
Antoni Trenchev, co-founder and managing partner at crypto platform Nexo, says “there’s several competing narratives with Bitcoin,” referring to the digital asset’s use as an inflation hedge and as censorship-resistant. “Bitcoin is both a risk-on and a risk-off asset. It’s just that when panic occurs, there’s initial selling,” he said.
For most of this year, Bitcoin has been trading sideways, failing to sustain any advances above $45,000. Edward Moya, senior market analyst at Oanda, wrote in a note on Friday that “Bitcoin’s broadening formation could see selling pressure look to test the $37,000 area.”
With Russia’s invasion nearing the two-week mark, a debate has been raging about whether cryptocurrencies are a hedge against increasing willingness among governments to seize financial assets — or a convenient sanctions-evasion tool that needs stricter policing.
Lloyd Blankfein, the former chief executive officer of Goldman Sachs Group Inc., in a tweet late Sunday said crypto prices currently don’t appear to support the former argument.
(With inputs from Bloomberg)
Never miss a story! Stay connected and informed with Mint.
our App Now!!