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Cryptocurrencies bounce back from Sunday sell-off, bitcoin still down 30% in May

CryptocurrencyMay 24, 2021 04:32PM ET
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© Reuters. FILE PHOTO: Representations of the virtual currency Bitcoin stand on a motherboard in this picture illustration taken May 20, 2021. REUTERS/Dado Ruvic/Illustration

By Tom Wilson, Tom Westbrook and Stephen Culp

NEW YORK (Reuters) -Bitcoin jumped more than 10% during a surge in cryptocurrencies Monday, regaining some ground lost during a weekend sell-off that was sparked by renewed signs of a Chinese crackdown on the emerging sector.

Bitcoin, the world's largest cryptocurrency, was last up 12% at approximately $39,400, erasing losses of 7.5% from a day earlier but still down by more than 40% from last month's record high.

Second-largest cryptocurrency ether jumped nearly 19% to $2,491 after slumping more than 8% on Sunday to near a two-month low. It too has fallen by almost half from a peak hit earlier this month.

Bitcoin added to its gains late on Monday following tweets from billionaire Elon Musk that appeared to soften his stance against the environmental impact of the cryptocurrency. Musk said on May 12 that Tesla (NASDAQ:TSLA) will no longer accept bitcoin due to its consumption of fossil fuels during the mining process.

"Spoke with North American Bitcoin miners. They committed to publish current & planned renewable usage & to ask miners WW to do so. Potentially promising," Musk wrote.

In the past week policymakers have stepped up their response to the popularity - and volatility - of cryptocurrencies. On Monday, Federal Reserve Governor Lael Brainard told a virtual conference organized by CoinDesk that the growth in "private money," digital payments and steps by other central banks were sharpening the focus on Central Bank Digital Currencies, or CBDC.

While her comments did not cause much of a price move, she did say that the wide use of private money poses consumer and stability risks given possible "run-like behavior."

Her comments were echoed later in the day by Atlanta Fed President Raphael Bostic.

"It is moving fast. The crypto space in particular right now if you characterized it – it is an extremely volatile market and I don’t think its characteristics right now are conducive for them to be currency," he said.

But Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago, said: "What we're seeing is an evolution from being an outlaw currency to something that could become potentially more mainstream. In order for it to become mainstream, there’s going to have to be rules and regulations around that," he said, "and that is what is creating the short-term volatility in all of the cryptocurrencies."

Bitcoin is up approximately 35% this year but down nearly 40% from the year's high of $64,895.22 on April 14.

Billionaire investor Ray Dalio on Monday announced that he is holding bitcoin at Coindesk's annual Consensus conference.

The Bridgewater Associates founder did not give further details but said that in an environment where government debt is at historic levels and competition from China is increasing, the U.S. dollar is under pressure and diversification is important.

He added that “bitcoin’s greatest risk is its success,” because as more people choose to put their savings into the digital currency, it becomes more of a threat to the traditional monetary system.

“Personally I’d rather have bitcoin than a bond,” he said in the pre-recorded interview from May 6.

SUNDAY SLUMP

The catalyst for Sunday's slump was cryptocurrency "miners" - who mint cryptocurrencies by using powerful computers to solve complex math puzzles - halting Chinese operations in the face of increasing scrutiny from authorities.

The attention on miners in China - who account for some 70% of supply - is the latest front in a wider push by Beijing against the cryptocurrency sector.

Major cryptocurrency exchange Huobi on Monday suspended both crypto-mining and some trading services to new clients from mainland China, adding that it would instead focus on overseas businesses. Others also suspended business in China.

In the short-term, market players said, that is likely to lead to pressure on prices as miners sell bitcoin held on their balance sheets.

Crypto market players said fears over the China crackdown would likely linger.

"Nobody's really sure about what happens next," said Joseph Edwards, head of research at crypto brokerage Enigma Securities. "Crypto clearly finds itself in a tough spot in terms of the narrative right now, and it's taken a lot of oxygen out of the room."

Bitcoin had stabilized from a bruising week on Saturday after Tesla boss Musk - whose comments on cryptocurrencies have been a key price driver in recent months - tweeted support for crypto in "the true battle" with fiat currencies.

Yet after last week's 25% drop, triggered in part by toughening language from Chinese regulators, bitcoin remains more than 40% below last month's record high of $64,895.

"It is too early to call the end of the recent bitcoin downtrend," J.P. Morgan analysts wrote.

Publicly listed bitcoin funds saw outflows of more than $530 million last week, their fifth straight week of loses, they said, in a sign of retrenchment by institutional investors.

Cryptocurrencies bounce back from Sunday sell-off, bitcoin still down 30% in May
 

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Comments (20)
Bhee Jay
Bhee Jay May 24, 2021 10:36PM ET
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are you sure
Σπυρος Γλυνης
Σπυρος Γλυνης May 24, 2021 10:22PM ET
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shiba inu oeoeoeoe shiba shiba shiba love shiba
Behrouz Hashemian
Behrouz Hashemian May 24, 2021 5:35PM ET
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You frightened the people by decreasing price and forced people to sell their crypto. it's look like thefthing their money....
Mohd Zulfadzly
Mohd Zulfadzly May 24, 2021 1:10PM ET
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hi gak
Abdul Aziz Attack
Abdul Aziz Attack May 24, 2021 1:03PM ET
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Bob Mikan
Bob Mikan May 24, 2021 12:14PM ET
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Something to with China ?
me ish
me ish May 24, 2021 10:48AM ET
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the Chinese and Musk can do and say what they like - the rise of crypto is unstoppable - this is clear to anyone who actually has bothered to take the time to understand their vast benefits and the future potential of blockchain technology - I absolutely don't care that half my crypto wealth has disappeared in the last two weeks - over the past five years I'm still up 1000s of percent and the market will bounce back incredibly quickly. I'm pleased Chinese miners will have to move - too much bad electricity from coal powered generation - many parts of the world are using the cheapest form of electricity for mining and other crypto activity and that cheapest electricity is of course from renewable energy and renewables are taking market share from fossil fuel based energy at an ever increasing rate.
Mars Zero
Mars Zero May 24, 2021 10:48AM ET
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....of course my horse...
Intərnashənl Jobair
Intərnashənl Jobair May 24, 2021 10:11AM ET
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Ankit Jain
Ankit Jain May 24, 2021 10:01AM ET
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next article will biticoin lossed after the hard fight. remember the central bank keep telling you central bank coin will come to destroy the Crypto and are succesful what the history tell you never fight the fed . fed will make biticoin value zero soon but this time it up against american fool . so American central bank will destroy the amercian wealth I like that
Veronica Faulkner
Veronica Faulkner May 24, 2021 10:01AM ET
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So is not advisable to put more money
me ish
me ish May 24, 2021 10:01AM ET
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there are over 200 countries in the world that can host servers to carry out crypto - central banks would have to literally close down the internet to prevent crypto from thriving. That would be shooting themselves in the foot somewhat!
perplexed76 .
perplexed76 . May 24, 2021 9:28AM ET
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who are giving true bitcoins for fiat $$$??? elon, is that you?
taylor jason
taylor jason May 24, 2021 9:28AM ET
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lol bitcoin is fiat...
me ish
me ish May 24, 2021 9:28AM ET
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taylor jason  by definition btc cannot be fiat - btc has a limited supply - all fiat can be continuously created into existence with no limit - that's one of the many reasons that makes such coins valuable, as well as their brilliance in low cost transfer almost instantly around the globe without the need for an archaic banking system to take its cut and perhaps even decline your transfer for any number of stupid reasons - you haven't got a clue what you're on about clearly.
Zach Lohman
Zach Lohman May 24, 2021 9:28AM ET
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taylor jason No central authority declared BTC as money, therefore it’s not fiat.
Jamie Kent
Jamie Kent May 24, 2021 9:28AM ET
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taylor jason Not really fiat...more like ponziat
Jamie Kent
Jamie Kent May 24, 2021 9:28AM ET
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banking systems are constantly evolving/updated, not really archaic; it's not like nothing has changed in online banking since its inception. Most banks don't tale a cut of anything for most people, unless you are talking about loans....by the way; if there are no banks how will people get loans for homes, cars, etc.? I'm not saying I particularly like banks, but a lot of what you are saying doesn't make sense.
Randy Chris
Randy Chris May 24, 2021 8:49AM ET
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Good signs i’m on it jusy bought for 10000& k
Veronica Faulkner
Veronica Faulkner May 24, 2021 8:49AM ET
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I meed someone to put me through, veronica is my name
neang aee 냥에
neang aee 냥에 May 24, 2021 8:44AM ET
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your life coins today
Mike Neff
Mike Neff May 24, 2021 8:37AM ET
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Nice! Keep on up!
Jan Buyle
Jan Buyle May 24, 2021 6:29AM ET
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Lower lows lower highs... it's going to the basement...
me ish
me ish May 24, 2021 6:29AM ET
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nope - bouncing back well within the next two months - if you can be that patient and dollar cost average buying the dips now, you'll make a mint.
neang aee 냥에
neang aee 냥에 May 24, 2021 6:16AM ET
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Market follows coins...What a pity
Jokers R Us
Jokers R Us May 24, 2021 5:58AM ET
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Here we go.  . Sell when others are greedy.
me ish
me ish May 24, 2021 5:58AM ET
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I'm buying whilst others are fearful now lol
Jan Buyle
Jan Buyle May 24, 2021 5:40AM ET
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Musk is a market manipulator... he mislead the sheep folllowing him for his own gains... and now he is surprised they turn their back on him... Crypto's have zero value, it' a scam. That is the simple truth.
me ish
me ish May 24, 2021 5:40AM ET
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you couldn't be more wrong - that's like saying in 1998, Google has no profit potential - once you understand the vast benefits of blockchain technology, you'll realise there is huge profit potential in so many crypto projects - you've clearly not done your research. But it's those kind of comments of ignorance that keep many people from bothering to invest, whilst folk like me, who've been investing for over five years have become millionaires - and continue to sell the peaks and buy the troughs - follow a few simple rules and it's a huge and easy way of making vast amounts of money and investing in the Internet 2.0
Jamie Kent
Jamie Kent May 24, 2021 5:40AM ET
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me ish proof or ban....oh wait, this isn't reddit, lol
Eudon Hickey
Eudon Hickey May 24, 2021 4:42AM ET
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If mining gets stopped(supply) then demand might skyrockets. Watch the space
Anita Yellow
Anita Yellow May 24, 2021 4:42AM ET
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If the Chinese government prohibits miners, it means great opportunities for miners from other countries, the less rivals, the greater profit and low hashrate
Anita Yellow
Anita Yellow May 24, 2021 4:42AM ET
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i mine BTC at a price of $ 600-900 long time ago , now i'm confused when starting trading, at what price should i put a stop loss ?
Church of Bear Market
Church of Bear Market May 24, 2021 4:10AM ET
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It is written that a wise man should not cross the ocean on a boat that leaks 50% in two weeks.
perplexed76 .
perplexed76 . May 24, 2021 3:34AM ET
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who are selling true money for fiat dollars?
Show previous replies (3)
perplexed76 .
perplexed76 . May 24, 2021 3:34AM ET
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Amine Fourali  i'm asking Elon not you
perplexed76 .
perplexed76 . May 24, 2021 3:34AM ET
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Beer Marco  do "they" accept fiat money too? so they are not too picky lol
me ish
me ish May 24, 2021 3:34AM ET
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The Watcher  it's not that difficult if you follow a few simple rules - don't invest more than you're happy to lose. buy a selection of well researched cryptos that clearly have benefit cases and that have great backing by serious organisations and have a great team of world class programmers and mathematicians - like Cardano to name one really obvious one - buy when everyone has sold and at the usual big crypto winters and dips; take profits at frothy tops - that's it - don't chase the prices up and buy when there's been a massive surge in prices - stick to those rules and like me, you'll make an absolute fortune on crypto.
Jamie Kent
Jamie Kent May 24, 2021 3:34AM ET
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True money? Nope, not me; not selling my gold and silver. I heard there is some newfangled mathematical money that is failing. People will save whatever fraction of their investment that they can and some of that money will flow into gold and silver.
Jamie Kent
Jamie Kent May 24, 2021 3:34AM ET
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when the music stops and the party ends, btc will be worth less than 5k, gold at 10k, and silver at 150+.....and the dollar will be nearing toilet paper territory. Whatever you do, don't hold on to USD.
 
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