What’s Wrong with Bitcoin? It Keeps Falling!

Bitcoin
  • Report on Goldman pull-back adds to concerns over user base
  • One market watcher says next key level for Bitcoin is $5,000

Cryptocurrencies dropped sharply for the second time in less than 24 hours, sinking toward a nine-month low amid concern that broader adoption of digital assets will take longer than some anticipated.

 Bitcoin, the largest cryptocurrency, tumbled as much as 9.8 percent and was trading at $6,422 as of 1:25 p.m. in Hong Kong, according to Bloomberg composite pricing. The Bloomberg Galaxy Crypto Index, a gauge of the largest digital assets, traded near its lowest level since November 2017 as rival coins Ripple, Ether and Litecoin also fell.
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Cryptocurrency bulls who counted on an expanding user base to drive up prices have been dealt a string of recent disappointments. Business Insider reported on Wednesday that Goldman Sachs Group Inc. was pulling back on near-term plans to set up a crypto trading desk, while trading platform ShapeShift AG said on Tuesday that it will begin asking users for personal information — a policy that may drive away customers who value anonymity. The moves follow last month’s decision by U.S. regulators to reject another round of Bitcoin exchange-traded fund proposals.

 “A lot of retail investors’ hopes for a bigger institutional presence were really being driven by Goldman Sachs,” Stephen Innes, head of trading for Asia Pacific at Oanda Corp., said by phone from Singapore. “This is just a negative, negative sign as far as liquidity goes.”
While many banks and institutional investors are dipping their toes into the world of cryptocurrencies, concerns about everything from money-laundering to market manipulation and unclear regulations have prevented widespread adoption. The market value of virtual currencies tracked by CoinMarketCap.com has slumped about 75 percent from its January peak to $204 billion.

The next key level to watch for Bitcoin is $5,000, according to Innes, who said a drop below that threshold may cause losses to accelerate.

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