TOKYO (Reuters) – Bitcoin consolidated around $ 60,000 on Monday, taking a breather from the weekend’s record high as investors prepared for inflation concerns and US stimulus spending to make it even higher.
The world’s most popular cryptocurrency fell to $ 58,956.90 early in the Asian session, falling from Saturday’s all-time high of $ 61,781.83.
The rally may have been dampened by a Reuters report that India would pursue a ban on digital assets, a rain cloud for bitcoin following high-profile recommendations this year from Tesla’s Elon Musk, Twitter’s Jack Dorsey and investment giants Goldman Sachs and Black rock.
Bitcoin has more than doubled in 2021, after quadrupling last year.
“Investments by institutional investors and companies are on the rise. It’s what I call bitcoin’s financialization, ”said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.
“It will be an asset that investors can no longer ignore.”
Bitcoin’s rise over the weekend was helped by an improvement in risk appetite in the financial markets after President Joe Biden legally signed his $ 1.9 trillion fiscal stimulus package and ordered an acceleration of vaccinations.
That momentum carried through to thinner markets over the weekend, with technical factors driving the movement bigger, according to Justin d’Anethan, sales manager at digital asset company Diginex in Hong Kong.
“The crypto market is heavy on derivatives,” he noted.
“A small increase led to a lot of liquidations during Saturday and Sunday, making it a not so small move.”
Seth Melamed, Tokyo-based chief operating officer of cryptocurrency exchange Liquid, said legislation of the kind India is proposing will not be a barrier to further gains for bitcoin.
“Because it is decentralized, the government’s ban or acceptance is somewhat irrelevant,” Melamed said. “Capital will find a way.”
Reporting by Kevin Buckland; Additional reporting by Sagarika Jaisinghani and Alun John; Adaptation by Vidya Ranganathan and Jacqueline Wong