Bitcoin continues its descent amid whispers of U.S. Federal Reserve tapering economic stimulus and China's ongoing pressure on crypto miners.
Bitcoin’s price has fallen to its lowest point in over a week as traders stare down prospects of shifting U.S. monetary policy and continued tightening of regulation of cryptocurrencies in China.
At 20:00 UTC on Monday, the price of the world’s foremost crypto began declining from around $35,466 to a low of $33,221. Prices were up slightly on the hour, and one bitcoin (BTC, -7.78%) was changing hands for roughly $33,793 at the time of publication.
The move marked the largest single daily loss for the bulls after dropping 6.2%, the most since May 28, amid sell pressure egged on by fading bullish investor sentiment.
Some are pointing toward the ongoing pressure from mainland China on crypto mining operations and trading where Weibo accounts from key opinion leaders in crypto have been blocked.
“China continues to pressure crypto with rolling mining bans wiping out its most popular social media platform, Weibo, clean of crypto influencer accounts,” said Jehan Chu, managing partner at Hong Kong-based crypto investment firm Kenetic Capital. “This signals a tightening noose around crypto on the mainland.”
Markets worldwide have also been trading on shaky ground as investors eye the possibility that the U.S. Federal Reserve could begin to unwind from its liquidity-boosting quantitative easing program. Though some, including $7.5 billion hedge fund Skybridge Capital, whose bitcoin holdings exceed $310 million, say tapering of U.S. monetary policy is unlikely to affect crypto and gold, arguing those asset classes possess resilience.
Meanwhile, Deutsche Bank, Germany’s largest lender, has said the U.S. could be in for one of its worst inflationary periods in history with government spending and loose monetary policy likely catalysts for creating conditions last seen in the 1940s and 1970s.
“While long-term fundamentals remain intact, U.S. monetary and macroeconomic policy are causing short-term jitters,” Chu said. Indeed, investors have been offloading some of their investments in hopes of entering at lower points as U.S. monetary and fiscal policy grows clearer, the managing partner said.
Other notable cryptos were also trading in the red, with the top 10 by market capitalization having fallen between 7.3% and 12.9% over the previous 24 hours. Polkadot and XRP (-10.52%) were the hardest hit, down 12.93% and 11.39% respectively.