Altcoins Lead Cryptocurrencies Lower After Bitcoin Futures Start Slow
Altcoins Lead Cryptocurrencies Lower After Bitcoin Futures Start Slow
(Bloomberg) -- Cryptocurrencies extended Tuesday’s slide as Bitcoin dropped below $9,000 for the first time since June.
Bitcoin tumbled as much as 17% to $8,087, the most on an intraday basis since January 2018. So-called alternative coins such as Ether and Litecoin slumped even more, declining as much as 25% and 21%, respectively.
As often is the case with digital assets, multiple reasons are being cited by traders for the decline, from the lackluster introduction of one-day Bitcoin deliverable futures Monday to a general risk-off atmosphere with U.S. equity markets taking a downturn Tuesday afternoon.
“Price action is being driven by short-term technical analysis right now, as every low price that Bitcoin has bounced off of, and every high price that has been reached has proven to be resistance,” Jeff Dorman, chief investment officer at Arca, a Los Angeles-based asset manager that invests in cryptocurrencies, said in an email. “Because crypto is still dominated by short-term focused traders, these telegraphed narratives often become self fulfilling prophecies.”
Bitcoin fell for a second day even with the Intercontinental Exchange Inc.’s introduction of future contracts that settle in the digital currency for the first time by a U.S. federally regulated exchange. The ICE’s Bakkt venture issued 113 one-day contracts Tuesday.
“There was certainly some let down from Bakkt’s “disappointing” start, but those expectations were unrealistic.,” Dorman said. “It’s far better for Bakkt to start slow, on board customers, and show growth over time than to come out guns blazing and then fall flat 2 months later.”
--With assistance from Nancy Moran and Kenneth Sexton.
To contact the reporter on this story: Olga Kharif in Portland at okharif@bloomberg.net
To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Dave Liedtka
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