TOKYO (Reuters) – Bitcoin consolidated around $ 60,000 on Monday, taking a break from the record high of the weekend as investors prepared for concerns about inflation and spending US stimulus to boost even more so.
The world’s most popular cryptocurrency fell to $ 58,956.90 at the start of the Asian session, down from Saturday’s record high of $ 61,781.83.
The rally could have been dampened by a Reuters report that India would pursue a ban on digital assets, a rain cloud for bitcoin following this year’s high-level supports from Tesla’s Elon Musk, Jack Dorsey of Twitter and investment giants Goldman Sachs and BlackRock.
Bitcoin has more than doubled in 2021, after quadrupling last year.
“Investment by investors and institutional companies is increasing. It’s what I call bitcoin financialization, ”said Masafumi Yamamoto, currency strategist at Mizuho Securities.
“It’s becoming an asset that investors can no longer ignore.”
Bitcoin’s weekend rise was helped by an improvement in risk appetite in financial markets after President Joe Biden signed his $ 1.9 trillion fiscal stimulus package and ordered a acceleration of vaccinations.
That boost hit thinner markets over the weekend, with technical factors boosting the move, according to Justin d’Anethan, sales director for digital asset company Diginex in Hong Kong.
“The crypto market is very heavy on derivatives,” he noted.
“A small rise triggered many settlements during Saturday and Sunday, making it a not-so-small move.”
Seth Melamed, the head of Tokyo-based cryptocurrency exchange operations Liquid, said legislation of the type proposed by India will not be an impediment to making more profits for Bitcoin.
“Because it’s decentralized, prohibitions or government acceptance are a bit irrelevant,” Melamed said. “Capital will find a way.”
Reports by Kevin Buckland; Additional reports by Sagarika Jaisinghani and Alun John; Edited by Vidya Ranganathan and Jacqueline Wong