Bitcoin hit the skids Tuesday, dropping as much as 6.5%, continuing the volatile trading pattern that has marked the digital asset’s 12-year existence.
It recently traded at $61,115, down 5.85%. Bitcoin hit a record $68,790 just last Wednesday.
Tuesday’s move included the biggest intraday drop since Sept. 24, Bloomberg reported.
“After several days of gains, which saw bitcoin hover near its all-time high, as many other alt coins managed to reach new highs, we are seeing a significant pullback,” Walid Koudmani, an analyst at XTB Market, told Bloomberg.
“The extreme volatility that the market is prone to could lead to a potential domino effect if more negative news were to emerge and take prices to new lows.”
Meanwhile, hedge fund heavyweight Kyle Bass, founder of Hayman Capital Management, offered skepticism for bitcoin on Monday.
“From here on out, it’s going to be really difficult to make money [from bitcoin because of] intense regulation” from the U.S. government, following China’s ban on bitcoin earlier this year, he told Investor’s Podcast Network.
On Friday, the U.S. Securities and Exchange Commission rejected Van Eck’s proposal for an exchange-traded fund that would directly hold bitcoin, following the launch last month of two funds linked to bitcoin futures.
The securities industry regulator said that an ETF based on the spot price of bitcoin is vulnerable to market abuse.
Bitcoin’s advocates contend it’s a hedge for inflation. But an inflationary report Tuesday apparently broke that link. U.S. retail sales soared 1.7% in October, the most in seven months.