Crypto-currencies plunged on Monday, with bitcoin dropping more than 12 per cent to a one-week low as rising United States bond yields lifted the dollar broadly and hurt other safe assets that pay no income.
Bitcoin fell as far as $33,447, its lowest since January 6. According to Reuters, Ethereum which often moves in tandem with bitcoin, fell as much as 20 per cent to a one-week low of $1,007.51.
The falls were much larger than the one per cent drop that sent gold prices to a one-month low, but reflect a wider dollar bounce against major fiat currencies as the prospect of higher US interest rates tempers popular bets against the dollar.
“It’s just another way of expressing a dollar view,” Head of Research at Brokerage Pepperstone in Melbourne, Chris Weston said.
“I know it’s a macro play as well, but I do think that gold and bitcoin have been used in a fairly similar capacity,” he said.
Losses pared a little by lunchtime in Asia to put bitcoin at $35,192 – about 16 per cent below a record peak of $42,000 which the world’s most popular crypto-currency hit last week.