Bitcoin was sinking more than 19% on Monday, to a low of more than a week, putting the cryptocurrency on track for its biggest daily crash since March following strong gains it recently experienced.
At its last price, bitcoin was down 15% at $ 32,675, after having touched $ 30,699 earlier. its lowest elevation since January 5. If maintained, the crash would be the biggest since Covid-19 brought chaos to financial markets in March.
The decline reflects a broad rebound in the dollar against a basket of six prominent currencies, as the prospect of higher interest rates tempers bets against the greenback.
The second largest cryptocurrency, ethereum, which tends to move in tandem with bitcoin, lost 23%, hitting a week-long low of $ 985.
Interest in bitcoin has been rising on heavy buying from institutional investors, who see it as a hedge against inflation and more exposed to earnings if more widely adopted.
The cryptocurrency more than doubled in price since early December, to a record $ 42,000 on Friday, prompting some investment banks to warn of an impending bubble.
BofA said last week that the world’s most popular cryptocurrency could potentially minimize past bubbles, such as the dot-com boom of the late 1990s, China in the 2000s, and gold in the 1970s.
Nonetheless, strategists at JPMorgan claimed that bitcoin has emerged as a rival to gold and could hit $ 146,000 if it stabilizes as a safe haven asset.