Cryptocurrency Prices Tumble
Although US markets opened higher after the long weekend, they declined throughout the session to eventually close unchanged to slightly down. The S&P 500 closed down 0.35% after being as much as 0.7% up at one point early in the session. The ASX 200 was down yesterday as the rally that started late last year appears to have stalled for now.
Gold prices managed to hold near three-month highs at US$1,338 while WTI oil has fallen back below US$64 per barrel. The iron ore rally has also paused with the price now hovering around US$75 per tonne. US bond yields have stabilised for now with the 10-year bond trading at around 2.54%. The multi-year high of 2.63% is still in sight but yields haven't yet had a run at this level.
The cryptocurrency market had a weak session with bitcoin falling around US$2,500 or 20%. Last night's decline brings the drawdown from the all-time highs to approximately 44%. The initial bout of selling was sparked by comments from the South Korean finance ministry that the government is still considering the option of shutting down bitcoin exchanges. Further negative comments by other central bankers/regulators around the world kept the pressure on but ultimately, the market was probably just looking for an excuse to sell-off given the rapid run-up in price over the past year. The question from here is whether the peak for bitcoin is now in or if a recovery will eventually lead to new highs.
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This article was written by William O'Loughlin – Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via firstname.lastname@example.org or by phoning +612 8302 3633.