The sharp declines came after China banned financial and payment institutions from providing cryptocurrency services.
Bitcoin dropped to $30,066, the lowest since late January. It was last down 22% at $33,502. The most popular cryptocurrency posted its largest one-day loss since March 2020. Ethereum fell to as low as $1,850, its weakest level since late January as well. It was last down 28% at $2,439. Ethereum s one-day losses were the biggest since March last year. Bitcoin, the biggest and best-known cryptocurrency, had already been under pressure from a series of tweets from Tesla boss Elon Musk, but the news from China sent it as low as $36,250, a 15% drop in the trading session.
Inflation is coming. Or wait, it’s already here. Bond investors are looking at the 4.2% annual rate that U.S. consumer prices jumped to in April and wondering if it’s all because of depressed levels from last year. Could it be that the Federal Reserve is wrong about higher prices being transitory? In that case, the Fed and other central banks may have to rethink, among other things, their space-race-type competition to offer digital cash. It’s a project best undertaken after price pressures have eased, and the vast pools of excess liquidity to fill the gaping economic hole left by the pandemic have dried. A premature contest to introduce a digital yuan, digital euro, FedCoin or BritCoin could see them emerge as widely accepted substitutes, not only for physical cash but for bank reserves. Tackling inflation could then get harder.
The S&P Dow Jones Indices launched new cryptocurrency indexes, it said on Tuesday, further mainstreaming digital currencies including bitcoin and ethereum by bringing them to the trading floors of Wall Street. The new indexes, S&P Bitcoin Index, S&P Ethereum Index and S&P Crypto Mega Cap Index, will measure the performance of digital assets tied to them. The list will expand to include additional coins later this year, the division of financial data provider S&P Global said. The company first announced the plan in December when it said it would cover more than 550 of top-traded coins and that its clients will be able to create customized indices and other benchmarking tools on cryptocurrencies.
Bitcoin and other cryptocurrencies suffered hefty losses on Friday on concern that U.S. President Joe Biden s plan to raise capital gains taxes will curb investment in digital assets. The selloff came after reports that the Biden administration is planning a raft of proposed changes to the U.S. tax code, including a plan to nearly double taxes on capital gains to 39.6% for people earning more than $1 million. Bitcoin, the biggest and most popular cryptocurrency , slumped 5% to $48,8867, falling below the $50,000 mark for the first time since early March, while smaller rivals Ether and XRP fell around 7%. The tax plans jolted markets, prompting investors to book profits in stocks and other risk assets, which have rallied massively on hopes of a solid economic recovery. Levies on investment gains were reported to be in line for record increases.
Venmo, the peer-to-peer payment service owned by PayPal Holdings Inc, said on Tuesday it has started allowing users to buy, hold and sell cryptocurrencies on its app, a step that could inspire more mainstream adoption of the asset class. Venmo users will be able to buy bitcoin, ethereum, litecoin and bitcoin cash for as little as $1 and publish transactions on the app s feed, the company said. With more than 70 million customers, Venmo is one of the most popular payment apps in the United States, especially among younger consumers who use it to pay friends and family. It processed around $159 billion in payments last year.