BITCOIN remained some 30 per cent down on the year last night as the crypto crash which saw a host of ‘coins’ drop significantly in value at the back end of the week showed no signs of an immediate halt.
The ethereum coin was trading around $2,000 over the weekend, having hit as high as $4,811 during a bull run in the second half of last year.
The sudden crash in value – with a stablecoin called Terra Luna becoming all but worthless last week, wiping out billions-worth of value – has reignited calls for more crypto regulation.
US Treasury Secretary Janet Yellen last week called for new legislation, saying that so-called ‘stablecoins’ – those coins pegged to a fiat currency, usually the dollar – “run risks that could threaten financial stability”.
Matt Weller, StoneX’s global head of research, said over the weekend that regulation would almost certainly damage coin prices in the short term.
“Even if these inevitable new restrictions clarify the regulatory landscape in the long run, they are likely to make it more difficult to buy cryptoassets in the short term, to say nothing of the damage to market sentiment cause by a top token imploding in just 48 hours,” Weller said yesterday.
“Even the diehard crypto believers who have seen multiple bull-bear cycles are battening down the hatches for another crypto winter.”