Bitcoin slumps more than 5%, puts ‘digital gold’ status in jeopardy
Story by: AARON HANKIN
Bitcoin prices finally broke out of their recent lull Thursday, dropping as much as 6% and putting the $6,000 level back in play.
A single bitcoin BTCUSD, -5.14% was last going for $6,218.37, down 5.2% since Wednesday at 5 p.m. Eastern Time on the Kraken exchange. Earlier in the session, the world’s largest digital currency traded to an intraday low of $6,125.75, its lowest level since Sept. 19.
The decline comes on the heels of one of the worst sessions for global equities in 2018, putting bitcoin’s “digital gold” status in jeopardy. Bitcoin proponents have argued that the cryptocurrency would be a haven in times of turmoil, just like gold, and go up in value.
That hasn’t happened so far.
“The selloff also appears to have stretched to more exotic instruments, with bitcoin neither displaying the qualities one would expect of gold 2.0, as it has been touted as by some cryptocurrency enthusiasts, or simply escaping relatively unscathed as a new and relatively uncorrelated asset,” wrote Craig Erlam, senior market analyst at Oanda.
“This truly is a widespread selloff and anything perceived as a risky asset has been in the firing line. What will be interesting is whether this will be enough to force bitcoin below $6,000 which has proven to be something of a floor for the crypto on numerous occasions this year.
Altcoins, the group of coins other than bitcoin, have fared much worse than bitcoin, with all major altcoins showing double-digital losses in early Thursday trading. Ether was back below $200, trading down 12.3% at $196.03, Bitcoin Cash BCHUSD, -13.22% was off 13.7% to $440.90, Litecoin LTCUSD, -9.49% was trading 10.7% lower at $51.25 and XRP XRPUSD, -13.26% was at 40 cents, down 13.9%.
Coming off back-to-back losing session, bitcoin futures are trading much lower. The Cboe Global Markets October contract XBTV8, -5.50% was down 5.6% at $6,175 and the comparable CME Group October contract BTCV8, -5.05% was down 5.4% at $6,185
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