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Bitcoin falls by a fifth, cryptos see $1 billion worth liquidated

ForexDec 04, 2021 06:51PM ET
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2/2 © Reuters. FILE PHOTO: Representation of cryptocurrency Bitcoin is seen in this illustration taken November 29, 2021. REUTERS/Dado Ruvic/Illustration 2/2

By Maria Ponnezhath and Vidya Ranganathan

(Reuters) -Bitcoin shed a fifth of its value on Saturday as a combination of profit-taking and macro-economic concerns triggered nearly a billion dollars worth of selling across cryptocurrencies.

Bitcoin was 12% down at 0920 GMT at $47,495. It fell as low as $41,967.5 during the session, taking total losses for the day to 22%.

The broad selloff in cryptocurrencies also saw ether, the coin linked to the ethereum blockchain network, plunge more than 10%.

Based on cryptocurrency data platform Coingecko, the market capitalisation of the 11,392 coins it tracks dropped nearly 15% to $2.34 trillion. That value had briefly crossed $3 trillion last month, when bitcoin hit a record $69,000.

The plunge follows a volatile week for financial markets. Global equities and benchmark U.S. bond yields tumbled on Friday after data showed U.S. job growth slowed in November and the Omicron variant of the coronavirus kept investors on edge.

Justin d'Anethan, Hong Kong-based head of exchange sales at cryptocurrency exchange EQONEX, said he had been watching the increase in leverage ratios across the cryptocurrency markets as well how large holders had been moving their coins from wallets to exchanges. The latter is usually a sign of intent to sell.

"Whales in the crypto space seem to have transferred coins to trading venue, taken advantage of a bullish bias and leverage from retail traders, to then push prices down," he said.

The selloff also comes ahead of testimony by executives from eight major cryptocurrency firms, including Coinbase (NASDAQ:COIN) Global CFO Alesia Haas and FTX Trading CEO Sam Bankman-Fried, before the U.S. House Financial Services Committee on Dec. 8.

The hearing marks the first time major players in the crypto markets will testify before U.S. lawmakers, as policymakers grapple with the implications of cryptocurrencies and how to best regulate them.

Last week, the U.S. Securities and Exchange Commission (SEC) rejected a second spot-bitcoin exchange-traded fund proposal from WisdomTree.

Data from another platform Coinglass showed nearly $1 billion worth of cryptocurrencies had been liquidated over the past 24 hours, with the bulk being on digital exchange Bitfinex.

"If anything, this is the opportunity to buy the dip for many investors who might have previously felt like they missed the boat. We can see tether bought at a premium, suggesting people are getting cash ready, within the crypto space, to do just that," D'Anethan said, referring to the biggest stablecoin in the cryptocurrency world.

A plunge in bitcoin funding rates -- the cost of holding bitcoin via perpetual futures which peaked at 0.06% in October -- also showed traders had turned bearish.

The funding rate on cryptocurrency trading platform BitMEX fell to a negative 0.18% from levels of 0.01% for most of November.

Bitcoin falls by a fifth, cryptos see $1 billion worth liquidated
 

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Comments (11)
Alan Rice
Alan Rice Dec 05, 2021 3:19PM ET
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(If you sold yesterday El Salvador could have bailed you out.) If you like gambling, That's what Las Vegas is for !!
Romesh Bhandari
Romesh Bhandari Dec 05, 2021 11:36AM ET
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Central banks don't want crytocurency to flourish. want to float their own crypto
Aleksandr Radchenko
Aleksandr Radchenko Dec 04, 2021 8:34AM ET
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nothing surprising. big people have reaped a harvest of money. hopefully they bring that money to the stock market on Monday. the pandemic is coming to an end, now is the right time to buy shares in the real sector of the economy.
Stephen Donald
Stephen Donald Dec 04, 2021 7:25AM ET
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Central Banks want Crypto to fail. Crypto and NFT's are not the future of currency and economic exchange.
Connecticut Yankee
A_Jaundiced_Eye Dec 04, 2021 7:25AM ET
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Exactly.  This is not about Left-Right politics.  It is about CONTROL.  The bureaucrats are all about control.  Bitcoin will never succeed, because the bureaucrats would have to give up control of their currencies.
Kevin Shaughnessy
Kevin Shaughnessy Dec 04, 2021 7:25AM ET
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Connecticut Yankee you coild always move to El Salvador?
Anthony Spencer
Anthony Spencer Dec 04, 2021 6:47AM ET
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The overall blockchain industry is booming and will only continue to boom. This isnt about currencies this is about advancement of technology. Still a 98% adoption rate from web 2.0 to everything being run on the safer, faster blockchain. Ride the wave.
jason xx
jason xx Dec 04, 2021 6:37AM ET
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Buy the dip so the price can go up and manipulators can steal a new set of crypto investors money.
Al Smith
Al Smith Dec 04, 2021 3:37AM ET
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hey you can buy monopoly money still!!!!  only 41k now!!!
ARGANE RACHID
ARGANE RACHID Dec 04, 2021 3:03AM ET
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is going to crash about 80% just wait Will rise little bit and then going to 11000 $
jason xx
jason xx Dec 04, 2021 3:03AM ET
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Where do you people hide when you are waiting for btc prices to crash so you can post again?
Shai Berkovitz
Shai Berkovitz Dec 04, 2021 2:21AM ET
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Looks like margin calls, a good time to load up the boat
Edward Chong
Edward Chong Dec 04, 2021 2:21AM ET
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16% is not margin call. someone is coming out at all costs.
Michiel Vleminckx
Michiel Vleminckx Dec 04, 2021 2:10AM ET
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And that little piece of paper in your hands or that number on your bank account is any more real? Its only as real as the people in power decide it is. I hope they make good descisions for your money.
perplexed76 .
perplexed76 . Dec 04, 2021 1:32AM ET
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a piece of playmoney for 47k? When will this joke stop
 
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