Bitcoin and ethereum fall as crypto slide continues

·3-min read
Bitcoin symbol is seen on a crypto currency exchange shop in Zagreb, Croatia on September 16, 2021. (Photo by Beata Zawrzel/NurPhoto via Getty Images)
One analyst believes digital currencies are the 'inevitable future of money'. Photo: Getty Images

Major cryptocurrencies were down on Friday morning as broader markets remain subdued, partly because concerns on what impact the new Omicron COVID-19 variant will have on economies.

Bitcoin (BTC-USD) was down almost 2%. After a price crash last weekend, bitcoin’s price had managed to rise above $50,000 (£37,875), a key level, earlier this week. However, at the time of writing it was trading at $48,344.

It’s about 30% down from its all-time high of $69,000.

Ethereum (ETH-USD), the second largest crypto by market cap, plunged 5% to trade at $4,100.

“Since the 20% flash crash last weekend – which was triggered by a wider risk-off sentiment that also impacted many areas of global stock markets – bitcoin had been making small gains over the last few days," said Nigel Green, CEO of deVere Group.

“But it has failed to hold on to this momentum after not being able to hold above $50,000. This is an important threshold and the failure to secure it will likely spook some traders.”

Bitcoin's price was down on Friday morning. Chart: Yahoo Finance UK
Bitcoin's price was down on Friday morning. Chart: Yahoo Finance UK

Green, who had earlier forecast that bitcoin could hit $100,000 by year end, added that he is using the lower prices of bitcoin and other major cryptocurrencies to top-up his portfolio "because like many major corporations, financial institutions, governments, prestigious universities, and household-name investing legends, I’m confident that digital currencies are the inevitable future of money".

“In our increasingly tech-driven, globalised world, it makes sense to hold digital, borderless, decentralised currencies. In addition, adoption and demand are increasing all the time, whilst at the same time, supply is decreasing."

Read more: Live crypto prices

Meanwhile Kunal Sawhney, CEO at equities research firm Kalkine Group, told Yahoo Finance UK. cryptocurrencies have remained volatile with investors shifting focus to conventional assets, mostly safe havens and equity components with resilient outlooks.

He said Omicron-led fears have heightened anxiousness, with pessimism around crypto-assets snowballing.

He believes the "crypto-ecosystem is poised to witness the heat of any major disruption due to the pandemic", unlike early last year when the pandemic had actually "steered massive buying into the crypto space."

Read more: European stock markets subdued after lower-than-expected UK growth

However, he said with the approaching festivities of Christmas, higher consumption and spending could reinstate lost confidence amidst the investors, catalysing gains for crypto-assets.

Either way, interest in crypto is far from waning.

One example of this is that Visa (V) is starting a crypto advisory practice. Its main agenda will be helping companies and financial institutions to capture and retain consumers who are interested in crypto services and non-fungible tokens, and aiding central banks to explore digital currencies for their nations.

Naeem Aslam, chief market analyst at AvaTrade, said "this is a good initiative because, according to a survey, 18% of participants will likely shift their main bank to one that offers crypto-related services in the next 12 months".

"To retain these consumers, consultants at Visa will help their clients gauge potential opportunities aligned to their needs and plan effective execution of products like crypto reward programmes and digital wallets."

Watch: What is bitcoin?