Downward Spiral: Bitcoin slumps as COVID-19 variant shakes markets

Bitcoin, the largest digital currency, fell as much as 7.8% to $54,377, its lowest since Oct. 12.

It was on track for its biggest one-day drop since Sept. 20, and has slumped by more than a fifth since hitting a record high of almost $70,000 earlier this month.

Scientists said the variant, detected in South Africa, Botswana and Hong Kong, has an unusual combination of mutations and may be able to evade immune responses or make it more transmissible.

“The spread of (the variant), especially to other countries, could wither investor appetite further,” said Yuya Hasegawa at Tokyo-based exchange Bitbank. “BTC’s upside will likely be limited and the market should brace for further loss.”

Bitcoin hit an all-time high of $69,000 earlier this month as more large investors embraced cryptocurrencies, with many drawn to its purported inflation-resistant qualities. Others have piled into the digital token on the promise of quick gains.

Yet it has remained highly volatile, drawing questions over its suitability as a stable store of value.