Bitcoin On Track For Biggest Weekly Drop Since September As Janet Yellen And Traders Scared Of ‘Double Spending’ | Currency News | Financial and business news

The price of bitcoin was set for its biggest week-long drop since September on Friday morning, after slipping around 9% since Monday.

Bitcoin – which hit an all-time high of nearly $ 42,000 on Jan.8 – fell to around $ 28,000 when trading began in Asia.

But then it came back to around $ 32,537 on Friday morning. That means it’s down about 9.2% since Monday, which puts it on track for the biggest weekly decline since falling 12% in September, according to data from TradingView.

If the price drops back to the lows seen during the Asia session, the price of bitcoin could be heading for its worst week since falling 33% in March 2020.

Read more: We spoke to Winklevoss-backed crypto platform Gemini about Bitcoin, how to use stablecoins and why regulation won’t end the digital currency boom.

Bitcoin came under selling pressure this week after Janet Yellen, Joe Biden’s choice for Treasury Secretary, suggested that the use of cryptocurrencies be “curtailed” because they were primarily used for “illicit financing” .

Many analysts reduce Bitcoin’s overnight slide to BitMEX Research report which suggested a loophole called “double spending” – when someone is able to spend the same coin twice – had happened in the cryptocurrency blockchain.

Still, BitMEX later said that the double-spending could in fact have been a different kind of less worrying transaction.

Bitcoin has skyrocketed in recent months, going from a 2020 low of less than $ 4,000 in March to over $ 41,000 earlier this month. Overall, it increased by around 290% last year.

The Ethereum cryptocurrency comrade was around 5% higher on Friday morning at $ 1,250. That was less than an all-time high of over $ 1,430 reached earlier this week.

Proponents say cryptocurrencies are quickly becoming safe haven assets that can protect investors’ portfolios from the risk of inflation and currency devaluation triggered by the unprecedented fiscal and monetary stimulus unleashed during the coronavirus pandemic.

They report a growing number of institutional investors interested in Bitcoin. BlackRock decided on Wednesday to add Bitcoin futures to two of its funds, underlining demand for the currency.

Still, regulators and critics have warned that cryptocurrencies like Bitcoin lack fundamental factors determining their value and are highly volatile, which means investors could “lose all of their money.”

Read more: Chief investment strategist of $ 9.6 billion volatility-focused fund manager explains why the stock market is about to get more chaotic in 2021 – and how investors can profit

Nevertheless, market interest has picked up sharply in recent months. Some analysts have said the recent drop may be an opportunity.

“The current correction is a blessing for those who missed the rally in which the cryptocurrency doubled from its previous high, from $ 20,000 to $ 40,000,” said Naeem Aslam, chief analyst at the market at Avatrade.

Craig Erlam, senior market analyst at the Oanda forex platform, said: “We can see a little rebound now, just like we did earlier this month.

“But the price action we’ve seen this month suggests there is some nervousness around these levels. It will definitely be an interesting watch over the next few weeks.”