|12 March, 2020

Bitcoin plummets as cryptocurrencies suffer in market turmoil

It has lost around 30% of its value in the last five days

Image used for illustrative purpose. Bitcoin.com buttons are seen displayed on the floor of the Consensus 2018 blockchain technology conference in New York City, New York, U.S., May 16, 2018.

Image used for illustrative purpose. Bitcoin.com buttons are seen displayed on the floor of the Consensus 2018 blockchain technology conference in New York City, New York, U.S., May 16, 2018.

REUTERS/Mike Segar

LONDON - Bitcoin plummeted on Thursday amid wild volatility, with traders citing a sell-off across global markets as fears of the economic damage from the coronavirus pandemic take hold.

The biggest cryptocurrency slumped as much as 24% during morning trading before clawing back some of its losses. It was last down 18% at $6,500, still on course for its biggest daily loss in five years.

It has lost around 30% of its value in the last five days, outpacing sharp losses for assets from stocks to oil as the pandemic wreaks havoc on the daily life of millions.

"We've seen de-risking across all asset markets," said Jamie Farquhar, portfolio manager at London-based crypto firm NKB. "Bitcoin is certainly not immune to that."

Global stocks plunged into a bear market and oil slumped on Thursday after U.S. President Donald Trump banned travel from Europe to stem the coronavirus.

With traders citing a rush away from risky assets across all asset classes, bitcoin's fall has undermined arguments that it acts as a safe haven in times of geopolitical stress.

The slump has also underlined nagging questions over bitcoin's practicality as a currency. Prone to wild and often inexplicable price swings, it has failed to take off as a means of payment and is used mainly a speculative token.

Bitcoin had risen by nearly half in the first six weeks of the year as investors bet that a combination of arcane tech factors in its code and expectations of mainstream acceptance were leading to a repricing. 

(Reporting by Tom Wilson; Editing by Tommy Reggiori Wilkes and Alison Williams) ((T.Wilson@thomsonreuters.com; 44-20-7542-4531; Reuters Messaging: t.wilson.thomsonreuters.com@reuters.net))

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