Bitcoin falls 50% below peak as selloff resumes

imageCryptocurrency News15 hours ago (Jun 08, 2021 08:59)

© Reuters.

By Samuel Indyk – The price of Bitcoin dropped towards $32,000 on Tuesday morning as the selloff in cryptocurrencies resumed. The world’s largest cryptocurrency by market cap now trades almost exactly 50% below its peak of around $65,000 hit in mid-April.

One of the latest reasons for the move lower is news that the US authorities managed to seize $2.3mln worth of Bitcoin paid to the hackers who hacked the Colonial Pipeline last month. The company that operates the pipeline had paid around $5mln to the hacker group but the Department of Justice said they had recaptured some of those funds.

It is unclear how the US authorities gained access to the private key to unlock the Bitcoin wallet containing the cryptocurrency paid to the group.

The use of cryptocurrency, and the subsequent recovery of funds, shows that Bitcoin may not be anonymous and untraceable as people thought, potentially being the catalyst for the latest bout of selling.

US Deputy National Security Advisor Anne Neuberger said cryptocurrency payments can help facilitate these cyber attacks.  

“The misuse of cryptocurrency is a massive enabler here,” Neuberger told CNN. “That’s the way folks get the money out of it. On the rise of anonymity and enhancing cryptocurrencies, the rise of mixer services that essentially launder funds.”

The news comes ahead of a the G7 meetings in the coming month where US President Biden is set to acknowledge that cybersecurity and the role of cryptocurrencies in cyber attacks need to be controlled.

There is nothing to suggest that the US will ban Bitcoin, as China is attempting to do currently, but the Biden administration may attempt to regulate the cryptocurrency industry to stop illicit transactions and money laundering.

Biden’s predecessor, Donald Trump, has also recently had his say on cryptocurrencies. The former president said Bitcoin looks like a scam.

“I don’t like it,” Trump said, “because it is another currency that competes with the dollar.”

According to Jeffrey Halley, senior market analysts at OANDA, the fall of Bitcoin through $35,000 triggered a downside breakout.

“The breakout has a target of $22,000, which could happen in the next few days,” Halley said. “Failure of $30,000 will basically put every long position since January 1st in the red, which I believe, will trigger another capitulation trade.”

At 08:55BST, Bitcoin is trading around $32,900, down around 9% in the last 24 hours.

Bitcoin falls 50% below peak as selloff resumes

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