Cryptocurrency crash: Bitcoin drops below $60,000, Ether falls amid broad dip

Cryptocurrencies fell on Tuesday, with Bitcoin sliding below $60,000 and Ether at its lowest levels this month.

The largest digital token dipped as much as 8.2% to $58,661. Second-ranked Ether tumbled more than 10%. The global crypto market cap has dropped some 10% in the past 24 hours to $2.7 trillion, according to tracker CoinGecko.

Technical indicators had suggested the strong run of late across the notoriously volatile market was due for a pause.

Some analysts also attributed the dip to new tax-reporting requirements for digital currencies that are part of the $550 billion infrastructure bill, which President Joe Biden signed into law Monday.

“We’ve seen the U.S. infrastructure bill get signed, which has initiated a selloff from traders who are concerned about regulation and taxation,” said Hayden Hughes, chief executive officer of Alpha Impact, a social-trading platform.

Huges also cited concerns about China continuing its regulatory crackdown. The country will study the option of levying punitive power prices for companies that are involved in cryptocurrency mining, National Development and Reform Commission spokeswoman Meng Wei said at a press conference.

Bitcoin has more than doubled this year, while Ether is up about sixfold. Both scaled records last week amid a fervor for digital assets driven by speculative demand and controversial arguments that they can hedge inflation risks. 

It “would be unusual to keep moving up without corrections,” said Vijay Ayyar, head of Asia Pacific with crypto exchange Luno in Singapore. He argued that “we’re seeing a healthy pullback” after a prolonged rally.

Bitcoin was trading at $59,077 at 10:25am in London.