Bitcoin falls 6%, but altcoins soar

Bitcoin falls 6%, but altcoins soar
Bitcoin falls 6%, but altcoins soar

Bitcoin fell by up to 6.5% on Tuesday, on track for its worst one-day drop in two weeks, as a wave of selling battered cryptocurrencies and other risk assets such as stocks

Bitcoin plummeted by up to 6.5% on Tuesday, on course for its biggest one-day drop in two weeks, as a wave of sellers hammered cryptocurrencies and other risky assets like stocks.

The price was last down 5.86% at $63,419, having hit a two-week low of $62,966, while ether sank 6.39% to $3,283.

Bitcoin is still up 52% this year, as investors poured into US exchange-traded funds backed by spot bitcoin.

The price reached a new high of about $74,000 on Thursday last week, prompting some profit-taking as well as a string of US data releases indicating that the Federal Reserve may not lower interest rates as much as previously expected this year.

Bitcoin has declined by about 9% in the last week, marking its worst week-on-week dip since September, while ether has dropped 13% following an upgrade to the underlying ethereum network.

However, the overall crypto complex has not performed as poorly.

On Monday, crypto business Galaxy Digital’s affiliate, Galaxy Asset Management, reported preliminary assets under management of $10.1 billion at the end of February, a 24.8% rise over the previous month, driven mostly by market gain, the company said.

Smaller tokens, often known as “altcoins,” have attracted their own traffic. According to Coingecko, the Solana network’s sol token increased by 19% in the last week, while Avalanche’s avax coin increased by 17%.

“In light of bitcoin’s recent all-time high and subsequent correction, we anticipate a period of market recalibration as investors seek equilibrium amidst unprecedented inflows into spot bitcoin ETFs,” analysts at Bitfinex wrote in a letter to clients.

Coins tied to AI-focused crypto projects have risen in tandem with tech equities such as Nvidia (NVDA.O), owing to an insatiable investor thirst for applications such as machine learning.

Coinbase’s (COIN.O) shares plummeted 5.2% on Tuesday, while crypto miners Riot Platforms (RIOT.O) and Marathon Digital (MARA.O) declined 3.7% and 4.2%, respectively.

MicroStrategy (MSTR.O), a software corporation and bitcoin buyer, saw its stock price plummet by more than 11%.

MicroStrategy reported on Tuesday that it has purchased 9,245 bitcoins as of Monday for $623 million, using money from a recent convertible offering that raised approximately $600 million.

Capital flows into the ten largest bitcoin ETFs have slowed in recent days.

According to LSEG data, $178 billion poured into major ETFs on Monday, compared to more than $400 billion on many days last week.

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