February 28, 2024, Bitcoin Office in Istanbul, Turkey.
Umit Turhan Koskun | Noor Photos | Getty Images
Bitcoin suffered sharp losses in overnight trading, a sign that the world’s largest cryptocurrency has not escaped its steep decline despite continuing to gain acceptance in the mainstream financial community.
Data display from Coin Metrics Bitcoin After trading above $72,000 on Thursday night, it fell to around $67,000 on Friday, a drop of about 7%. Prices rebounded to around $68,900 on Friday afternoon.
Bitcoin prices topped $72,000 on Thursday after falling sharply overnight.
It is unclear what caused the drop in Bitcoin, which trades 24 hours a day.
Bitcoin is still up about 60% year to date, with overnight losses coming from near all-time highs. Cryptocurrencies have been climbing higher over the past few months, driven in part by anticipation and demand for a new Bitcoin ETF launched in the United States in January.
“I think it’s a healthy move. We’re removing some of the leverage that has built up in the system,” Crypto.com CEO Kris Marszalek said on CNBC’s “Squawk Box” on Friday, adding that the selling pressure could come from in the options market.
Rapid rises and sharp declines have been a recurring feature of Bitcoin’s history. In previous bull markets, Bitcoin surged to over $68,000 in November 2021, only to fall below the $20,000 mark about a year later.
Cryptocurrency optimists say that as Bitcoin matures, the asset class’s volatility should decline. The emergence of Bitcoin ETFs makes investing in the cryptocurrency more accessible to a wider range of investors and could theoretically help reduce this volatility.
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