Bitcoin posted its worst two-day drop since March, sliding as much as 21% over Sunday and Monday as investors moved to perceived safe-haven assets - in this case not Bitcoin.
Bitcoin hit a record high of nearly $42,000 on Friday on continued interest in the digital currency as a hedge against inflation and an alternative to the falling dollar. The price of bitcoin has more than quadrupled in the past 12 months.
However, stocks fell on Monday as investors recalibrated their strategies amid expectations that proceedings to impeach current President Donald Trump will move forward, and as a surge in coronavirus infections continued to pummel the U.S.
That, combined with Friday's weaker-than-expected U.S. nonfarm payrolls report also prompted investors to move to cash, pushing the value of the U.S. dollar higher on expectations that the U.S. economy remains weak, at that inflation will stay tame.
That, in turn, prompted crypto investors to move out of bitcoin. At last check, bitcoin traded at $34,707, down 13.32%.
A report from the U.K.’s Financial Conduct Authority on Monday also pressured bitcoin after the regulator warned investments and lending products related to crypto come with “very high risks.”
At the same time, optimism that the Securities and Exchange Commission under new leadership could approve a bitcoin exchange-traded fund this year along with PayPal (PYPL) - Get Report allowing its users to buy and sell bitcoin across its platform has raised expectations that Bitcoin has a bright longer-term future.