Bitcoin edges back from $40,000 as volatility lingers

RSS NEWS Uncategorized

This Post was originally published here: Source Link

Representations of the virtual currency Bitcoin stand on a motherboard in this picture illustration
FILE PHOTO: Representations of the virtual currency Bitcoin stand on a motherboard in this picture illustration taken May 20, 2021. REUTERS/Dado Ruvic/Illustration

May 26, 2021

NEW YORK (Reuters) – Bitcoin climbed back above $40,000 on Wednesday for the first time this week, before edging off its highs, as recent volatility in the cryptocurrency market showed few signs of dampening down.

Bitcoin jumped as much as 6.5% to $40,904, before easing back to around $38,797 at 11:45 a.m. Eastern time. Smaller coins, which tend to rise and fall with the largest cryptocurrency, also gained, with ether climbing more than 7.5% to above $2,915 earlier in the day.

Still, bitcoin is down 30% this month, and has lost over 37% from its record high of almost $65,000 hit in April. It has gained over 40% this year, however.

“Cryptocurrency market volatility is not going away anytime soon,” said Edward Moya, senior market analyst at OANDA. “Right now the aftermath of the crypto plunge is having everyone dig a little deeper to try to find out, are the ESG and regulatory concerns going to pose a major risk in the short term?”

Bitcoin’s most recent slump has come amid concerns over the environmental impact of bitcoin production, an energy-intensive process known as mining, and as China has cracked down on the emerging sector.

Bitcoin touched a low of $30,066 last week, its weakest since January, in highly volatile trading.

BlackRock Chief Executive Larry Fink said on Wednesday the world’s largest asset manager is studying cryptocurrencies like bitcoin to determine whether the asset class could offer countercyclical benefits.

For now, it is too early to determine whether cryptocurrencies are “just a speculative trading tool” Fink said at the company’s annual meeting.

(Reporting by John McCrank in New York and Tom Wilson in London; editing by Thyagaraju Adinarayan and Alistair Bell)