Not so hot: Bitcoin's 50% plunge since April puts it far behind lumber, copper and US banks for the year

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© Dado Ruvic/Reuters Bitcoin has lost around half its value since April. Dado Ruvic/Reuters Once up more than 120% for the year, bitcoin’s dramatic plunge since April means the world’s biggest cryptocurrency is now lagging behind a host of more traditional financial assets in 2021.

  • Bitcoin’s 50% plunge since April has put its 2021 returns behind a host of more-traditional assets.
  • It now lags well behind commodities and US banks, which have jumped as economies have reopened.
  • Bitcoin’s gains were on a par with the S&P 500 and Dow Jones on Tuesday after another sharp drop.
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Bitcoin has lost around 50% of its value since peaking at close to $65,000 in April. It traded below $33,000 on Tuesday, around 13% higher than where it started the year.

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The 13% increase put it far behind some of 2021’s biggest risers – particularly commodities and bank stocks, which have jumped as economies have reopened and markets have stayed buoyant.

Bitcoin’s plunge even put the cryptocurrency roughly on a par with the Dow Jones and S&P 500 for the year.

Lumber prices have rocketed as housing markets around the world have boomed despite the coronavirus pandemic, with the random-length price rising around 40% in 2021. It stood at just over $1,220 per 1,000 board feet on Tuesday, after a fall in recent days.

Copper has also jumped as global manufacturing has picked up again, rising roughly 28% across the year to above $4.50 a pound on the New York Mercantile Exchange.

Even US banks, the bedrock of the traditional economy, were far outperforming bitcoin on Tuesday as a rebound in growth and rising bond yields boosted share prices. The Dow Jones US banks index has risen around 36% since the start of the year after a lackluster 2020.

Bitcoin was down close to 5% on Tuesday morning. Analysts said one explanation was that former President Donald Trump said the crypto asset “seems like a scam” on Fox Business. Another was that the US has recovered a major ransom payment by breaking into a wallet, denting the anti-government case for crypto.

The cryptocurrency could crash again if it falls much further, said Jeffrey Halley, senior market analyst at currency firm Oanda. “Failure of $30,000 will basically put every long position since January 1 in the red, which, I believe, will trigger another capitulation trade,” he said.

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