Cryptocurrencies tumble as new Covid-19 variant shakes markets

Bitcoin, the largest digital currency, fell as much as 9.2% to $53,551.

By Reuters

Published: Fri 26 Nov 2021, 5:49 PM

Bitcoin tumbled over 9 per cent on Friday, dragging smaller tokens down, after the discovery of a new, potentially vaccine-resistant coronavirus variant saw investors dump riskier assets for the perceived safety of bonds, the yen and the dollar.

Bitcoin, the largest digital currency, fell as much as 9.2 per cent to $53,551, its lowest since October 10. The second largest cryptocurrency ether fell over 13 per cent to its lowest in a month as investors ditched cryptocurrencies.

Bitcoin, whose 13-year life has been peppered by bouts of extreme volatility, was on track for its biggest one-day drop since September 20. It has slumped by more than a fifth since hitting a record high of almost $70,000 earlier this month.

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Scientists said the coronavirus variant, detected in South Africa, Botswana and Hong Kong, has an unusual combination of mutations and may be able to evade immune responses or make it more transmissible.

"The spread of (the variant), especially to other countries, could wither investor appetite further," said Yuya Hasegawa at Tokyo-based exchange Bitbank. "BTC's upside will likely be limited and the market should brace for further loss."

Bitcoin hit an all-time high of $69,000 earlier this month as more large investors embraced cryptocurrencies, with many drawn to its purported inflation-resistant qualities.

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Others have piled into the digital token on the promise of quick gains, a draw that has been heightened by record low or negative interest rates. Yet bitcoin's volatility has lingered, drawing questions over its suitability as a stable store of value.

Ether was last at $3,924. It is down almost 20 per cent from its record high hit on November 10.