The white-knuckle bitcoin ride yesterday took another twist as the worst two-day tumble in the digital currency since March last year stoked concern that the polarizing cryptocurrency boom might run out of steam.
Bitcoin slid as much as 21 percent over Sunday and yesterday to as low as US$32,389. That is the biggest two-day slide since global markets were first roiled by the COVID-19 pandemic last year and follows a record high of almost US$42,000 on Friday.
“It’s to be determined whether this is the start of a larger correction, but we have now seen this parabola break so it might just be,” said Vijay Ayyar, head of business development with crypto exchange Luno in Singapore.
Bitcoin’s price has more than quadrupled in the past year, evoking memories of the 2017 mania that first made cryptocurrencies a household name before prices collapsed just as quickly.
“Time to take some money off the table,” Guggenheim Investments chief investment officer Scott Minerd wrote on his verified Twitter account. “Bitcoin’s parabolic rise is unsustainable in the near term.”
Minerd late last month predicted bitcoin could eventually reach US$400,000.
True believers in bitcoin argue the rally this time is different from past boom-bust cycles because the asset has matured with the entry of institutional investors and is increasingly seen as a legitimate hedge against US dollar weakness and inflation risk.
Others worry that the rally is untethered from reason and fueled by vast swathes of fiscal and monetary stimulus, with bitcoin unlikely to ever serve as a viable currency alternative.
“Bitcoin is almost certainly in another bubble and its current growth rate is not sustainable,” Convoy Investments LLC cofounder Howard Wang (王昊昊) wrote in a note on Sunday. “While it may mature in the future, Bitcoin as it exists is largely a speculative asset.”
Bitcoin has shrugged off recent dips and might do so again, potentially recovering to as much as US$44,000 “before the actual correction,” Ayyar said.
Bitcoin was holding near session lows at about US$33,200 as of 7:08am in London. Rival digital assets are also slumping, with second-largest coin ether tumbling as much as 21 percent.
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
VERTICAL INTEGRATION: The US fabless company’s acquisition of the data center manufacturer would not affect market competition, the Fair Trade Commission said The Fair Trade Commission has approved Advanced Micro Devices Inc’s (AMD) bid to fully acquire ZT International Group Inc for US$4.9 billion, saying it would not hamper market competition. As AMD is a fabless company that designs central processing units (CPUs) used in consumer electronics and servers, while ZT is a data center manufacturer, the vertical integration would not affect market competition, the commission said in a statement yesterday. ZT counts hyperscalers such as Microsoft Corp, Amazon.com Inc and Google among its major clients and plays a minor role in deciding the specifications of data centers, given the strong bargaining power of
TARIFF SURGE: The strong performance could be attributed to the growing artificial intelligence device market and mass orders ahead of potential US tariffs, analysts said The combined revenue of companies listed on the Taiwan Stock Exchange and the Taipei Exchange for the whole of last year totaled NT$44.66 trillion (US$1.35 trillion), up 12.8 percent year-on-year and hit a record high, data compiled by investment consulting firm CMoney showed on Saturday. The result came after listed firms reported a 23.92 percent annual increase in combined revenue for last month at NT$4.1 trillion, the second-highest for the month of December on record, and posted a 15.63 percent rise in combined revenue for the December quarter at NT$12.25 billion, the highest quarterly figure ever, the data showed. Analysts attributed the
RSS