Bitcoin’s Fizzling 2021 Returns Start to Lag Mainstream Assets

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Bitcoin’s returns this year are slipping below traditional assets as cryptocurrencies struggle to regain the ground they lost in a May defeat.

The largest token fell nearly 6% in Asian trading on Tuesday and was on a two-week low of about $ 33,000 at 1:07 p.m. in Hong Kong. The broader Bloomberg Galaxy Crypto Index fell as much as 10%.

Bitcoin is still up 14% this year, but that is behind commodities as well as some European and Asian stocks. The immediate cause of Tuesday’s weakness was unclear – one theory was that the US recovery of a high-profile Bitcoin ransom showed that the token is not as out of official control as its main proponents claim.

The fact that investigators “could track down and seize the undetectable could undermine the libertarian, non-governmental scrutiny case,” said Jeffrey Halley, a senior market analyst at Oanda. The impact could have provoked the sale, he said.

The US has received back almost all of the Bitcoin ransom paid to the perpetrators of the cyber attack on Colonial Pipeline Co. last month as a sign that law enforcement agencies are able to track down online criminals, even if they are outside of the Operate national borders.

Strategists like Halley and Rich Ross from Evercore ISI are watching the key technical levels of Bitcoin. Halley said a break below $ 30,000 could result in “another surrender.” Ross sees an assistance test at $ 29,000.

Bitcoin crashed from a high of nearly $ 65,000 in mid-April, hurting the cryptocurrency sector. The sell-off was exacerbated by billionaire Elon Musk’s public reprimand about the energy consumption of the servers on which the token is based. The strict Chinese supervisory authority also clouded the mood.

The virtual currency – which more than tripled in the past year – is now in a “cooling phase” that could take “a few months” longer, said Vijay Ayyar, head of Asia-Pacific at the crypto exchange Luno Pte.

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