Bitcoin Extends Retreat From Record as ‘Bubble’ Talk Escalates
(Bloomberg) -- 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.
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The largest digital asset dropped as much as 7.2% on Friday before paring some of the slide to change hands at $67,725 as of 7:57 a.m. in New York. 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 less than 60%.
Bets on looser Federal Reserve monetary policy helped to 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.
Trouble Ahead?
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 since their debut on Jan. 11 as a fundamental support, as well as an upcoming reduction in the token’s supply growth.
Sylvia To, head of token partnerships and research at crypto exchange Bullish, flagged a cooling in the net ETF inflows to approximately $133 million on Thursday. “Buyer exhaustion in the market could be a catalyst” for the Bitcoin selloff, she said.