Bitcoin extended a retreat from its latest record high amid an intensifying debate about whether the bull run in cryptocurrencies is evidence of speculative froth in global markets.
The largest digital asset dropped as much as 5.6% in Asian trading on Friday before paring some of the slide to change hands at $67,300 as of 1:43 p.m. in Singapore. The token set a fresh all-time peak of almost $73,798 a day earlier.
Both this year’s advance in bitcoin and a gauge of the top 100 tokens — comprising the likes of Ether, BNB and Solana — moderated to roughly 60%.
Bets on looser Federal Reserve monetary policy helped power rallies in global stocks, bonds and crypto in the past few months, but investors are reassessing such wagers following evidence of persistent inflationary pressure in the US.
In a Bloomberg Television interview, Bank of America Corp. chief investment strategist Michael Hartnett said markets are showing the characteristics of a bubble in the record-setting surge by the technology sector’s so-called Magnificent Seven stocks and the all-time highs in crypto.
The comments feed into a live debate on Wall Street about whether many markets are vulnerable to a pullback. For bitcoin, supporters point to about $12 billion of net inflows into dedicated US exchange-traded funds and an upcoming reduction in the token’s supply growth as fundamental supports.
A report Thursday showing a jump in US producer prices stoked worries that the Fed’s campaign to get inflation under control is far from over.
Bitcoin was “undercut by the rise in US yields and the US dollar that followed the hot producer-price inflation data,” Tony Sycamore, a market analyst at IG Australia Pty, wrote in a note.
The token’s stumble came alongside
Read more on investmentnews.com