Bitcoin slides 5%, while altcoins sparkle

Representations of cryptocurrency Bitcoin are seen in this illustration, Aug 10, 2022. REUTERS/Dado Ruvic/Illustration/File photo

LONDON/SINGAPORE — Bitcoin fell by as much as 5.7 percent on Tuesday, on track for its largest one-day drop in two weeks, as a wave of selling hit cryptocurrencies and other risk assets, such as stocks.

The price was last down 4.2 percent at $64,550, having dropped to a two-week low of $63,555, while ether fell 4.4 percent to $3,355.

Bitcoin is still showing a 52-percent gain for the year so far, as investors have piled into U.S. exchange-traded funds backed by spot bitcoin.

The price hit a record high of nearly $74,000 on Thursday last week, which has triggered some profit-taking, along with a series of U.S. data releases that suggested the Federal Reserve may not cut interest rates this year as much as previously thought.

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In the last week, bitcoin has fallen by nearly 9 percent, set for its largest week-on-week decline since last September, while ether has lost 13 percent following an upgrade to the underlying ethereum network.

Smaller tokens gain

But performance has not been as weak across the broader crypto complex.

Smaller tokens, known also as “altcoins”, have drawn in flows of their own. The solana network’s sol token has gained 19 percent in the latest week, while avalanche’s avax coin has risen by 17 percent , according to Coingecko.

“In light of bitcoin’s recent all-time high and subsequent correction, we anticipate a period of market recalibration as investors seek equilibrium amidst unprecedented inflows into spot bitcoin ETFs,” analysts at exchange Bitfinex said in a note.

Flows of capital into the 10 largest bitcoin ETFs have slowed over the past few days.

According to LSEG data, $178 billion flowed into the major ETFs on Monday, compared with well over $400 billion on a number of days last week.