Bitcoin sinks 10%, extending losses after worst week since FTX collapse

Digital asset has been buffeted by range of factors since hitting record $73,798 in March

Bitcoin sank more than 10% on Monday, extending losses after suffering its worst week since the collapse of FTX in 2022, as a bout of risk aversion in global markets hit the largest digital asset.

Bitcoin fell as much as 10.4% before paring some of the losses to trade at $54,333 as of 9:17 a.m. in Singapore on Monday. The token lost 13.1% in the seven days through Sunday, marking its steepest weekly decline since the period of FTX’s bankruptcy.

Smaller tokens such as Ether and meme-crowd favourite Dogecoin also nursed heavy losses.

The declines come as a global stock selloff intensifies, reflecting concerns about the economic outlook and whether heavy investment into artificial intelligence will live up to the hype. Geopolitical tension is rising in the Middle East, adding to investor skittishness.

Bitcoin exchange-traded funds in the U.S. suffered their largest outflows in about three months on Aug. 2. The digital asset has also tumbled through its 200-day moving average price.

The latter technical chart pattern “opens the way for a deeper pullback” toward $54,000, Tony Sycamore, market analyst at IG Australia Pty, said in a note.

Bitcoin has been buffeted by a range of factors since hitting a record of $73,798 in March, including shifting political fortunes in the U.S. as pro-crypto Republican Donald Trump and Democratic opponent Vice President Kamala Harris — who has yet to detail a digital-asset policy stance — lock horns in the presidential race.

Also hanging over the market are possible sales of Bitcoin seized by governments and the risk of a supply overhang from tokens returned to creditors through bankruptcy proceedings.

Bond traders have amplified bets on U.S. interest-rate cuts beginning in September to support economic expansion. The recent upheaval in traditional markets “increases the likelihood of less restrictive monetary policy coming sooner rather than later — a good thing for crypto,” said Sean Farrell, head of digital-asset strategy at Fundstrat Global Advisors LLC.

Bitcoin's year-to-date advance has moderated to about 25%, compared with an 18% climb in gold and a 9% jump in a gauge of global stocks.