Bitcoin offices in Istanbul, Türkiye, February 28, 2024.
Umit Turhan Coskun | Nurphoto | Getty Images
Bitcoin suffered a sharp drop in overnight trading, showing the world’s largest cryptocurrency hasn’t bucked its trend of big declines even as it continues to gain traction in the mainstream financial world.
Coin Metrics data shows bitcoin Trading above $72,000 late Thursday, it fell to about $67,000 on Friday, a decline of about 7%. The price had risen to about $68,900 on Friday afternoon.
Bitcoin fell sharply overnight after trading above $72,000 on Thursday.
It was not immediately clear what caused the fall in Bitcoin, which is traded 24 hours a day.
Bitcoin is still up about 60% year to date, with the overnight decline coming from near record highs. The cryptocurrency has risen over the past few months, partly due to anticipation and then demand from new Bitcoin ETFs that launched in the US in January.
“I think this is a healthy step. We’re removing some of the leverage that has built up in the system,” Crypto.com CEO Chris Marszalek said on CNBC’s “Squawk Box” on Friday, adding that selling pressure is likely coming from the options market.
Rapid rises and steep declines have been a constant feature of Bitcoin history. In the previous bull market, Bitcoin rose above $68,000 in November 2021, but traded below the $20,000 mark about a year later.
Crypto optimists say volatility in the asset class should decline as Bitcoin matures. The emergence of Bitcoin ETFs, which make it easier for a wider range of investors to gain access to the cryptocurrency, could theoretically help reduce this volatility.