Turmoil sent Bitcoin to worst level since crypto bubble burst

Bitcoin peer tokens also got pummelled in March, with Litecoin off by about 35% and XRP losing 25%. Ether was among the hardest hit, dropping more than 40%. In this environment, many digital-token enthusiasts tempered their calls that cryptocurrencies can act as a haven in tempestuous times.

This month, bitcoin also notched some of its largest daily swings on record, shedding more than 27% on March 12 in what was its biggest one-day loss in nearly seven years. The token’s seen an average daily move of 5.8% in March, according to data compiled by Bloomberg. That compares with swings of 1.6% for the price of gold, which is traditionally thought of as a refuge.

“The volatility is largely due to the fact that it’s quite new and adoption rates are unstable, which leads to large levels of speculation,” Mati Greenspan, founder of Quantum Economics, wrote in a note. “For me, a measure of success would be to see bitcoin remain on a slow but steady incline, rather than zooming towards the moon due to global uncertainty.”

Some crypto fans are looking to Bitcoin’s upcoming halving instead —  a planned reduction in rewards miners receive for validating transactions. Bitcoin rallied in the run-up to the last halving,  which happened in 2016,  sparking optimism that the same will happen this time about. The event is expected to take place in May.

“While the recent downturn has been a consequence of a global black-swan event, we believe these headwinds for digital assets are short-term,” said Matthew Dibb, co-founder and COO of Stack, an institutional-grade digital asset platform in Asia. “The bitcoin halving on May 13 will provide yet another catalyst for a push towards $15,000 for bitcoin by 2021.”

To Oanda’s Erlam, volatile environments can provide opportunities, but bitcoin will have to prove its worth in the current one, he said. “It could be a turning point. I’m just not sure exactly what that would be.”

Bloomberg

Source: businesslive.co.za