Bitcoin prices fell in correction territory on Sunday morning, marking the sharpest decline for the digital asset since February, on the heels of what was a remarkable stretch for the crypto industry.
Finally check bitcoin prices BTCUSD,
Late Sunday morning was $ 55,773.11, down nearly 14% from a recent spike on CoinDesk of $ 64,829.14. The drop from the top of the crypto meets the generally accepted definition of a correction in an asset.
However, bitcoin slides of 10% or more are quite common, as the budding asset is considered inherently volatile. The last time cryptocurrency received decisively lower remarks from Treasury Secretary Janet Yellen at a New York Times DealBook conference was blamed for the slump.
This time around, market participants are still haunted by the specter of a crackdown by the Treasury, but they also cite a few other possible causes for bitcoin’s correction.
Read: Long-term crypto: what’s the outlook?
Crypto euphoria
Some industry participants point to an increase in speculative assets such as dogecoin as an indication that the digital asset market is hyped and vulnerable to a withdrawal. Dogecoin’s prices were up more than 7,252% from their recent high so far.
Galaxy Digital GLXY,
CEO Michael Novogratz says that while he sees bitcoin hit $ 100,000 by the end of 2021 and $ 500,000 by 2024, he believes the market will be marked by turbulence that he thinks is highlighted by a frenzied appetite for assets like dogecoin. DOGEUSD,
which was originally created as a parody of bitcoin and is considered by some to be of limited utility.
See: Who is laughing now? The epic rise of Dogecoin, creating millionaires overnight
Novogratz said the list of crypto platform Coinbase Global COIN,
offer has sparked “a lot of madness” around dogecoin, adding that “that never ends well,” speaking at a virtual event hosted by MarketWatch and Barron’s on Wednesday.
To manhandle? Or ‘FUD’
Others pointed to the spread of fear, uncertainty and doubt, or FUD, as the crypto community describes it.
Bloomberg News reported that further speculation of a cryptocurrency crackdown by the US Treasury in connection with the use of digital assets for money laundering, without specific details, also weighed on prices.
Coinbase hangover?
Some market participants have suggested that the highly anticipated Coinbase listing on Nasdaq Inc. NDAQ,
could prove to be a new top for the crypto market, putting prices under pressure after a steep rally in recent days and a new record for bitcoin early last week.
Checking out: Coinbase IPO: Everything you need to know about the ‘turning point’ moment in crypto
Yves Lamoureux, the president of Montreal-based macroeconomic research firm Lamoureux & Co., told MarketWatch that he feared the euphoria surrounding bitcoin and crypto and saw that they should be cut as a result. “Can you find someone out there with a bearish point of view?” he asked. “A resounding no,” he replied.
Read: Coinbase IPO is Huge Score on Crypto Platform’s “Who’s Who” List of Private Equity Investors
In any case, bitcoin prices remain high thanks to the growing attention from traditional investors. Several high-profile Wall Street players, including Stanley Druckenmiller and Paul Tudor Jones, have embraced bitcoin. Famed investor Bill Miller, founder of Miller Value Partners, wrote to customers on the company’s website, reaffirming his optimistic view of bitcoin.
Bitcoin prices are up about 90% so far this year. For comparison: gold prices GC00,
Considered a rival to bitcoin, so far had fallen more than 6% by 2021, and more traditional securities posted relatively higher pedestrian returns. The Dow Jones Industrial Average DJIA,
and the S&P 500 SPX,
are up more than 11% in the year to date, while the Nasdaq Composite Index COMP,
is up 9%.