Bitcoin offices are seen in Istanbul, Turkey, on February 28, 2024.
Umit Turhan Coskun | Nurphoto | Getty Images
Bitcoin suffered a steep drop in overnight trading, showing that the world’s largest cryptocurrency hasn’t shaken its tendency for big drops despite continuing to gain acceptance within the mainstream financial world.
Data from Coin Metrics shows bitcoin was trading above $72,000 late Thursday night before falling to about $67,000 on Friday, a decline of roughly 7%. The price had rebounded to about $69,670 on Friday afternoon.
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Bitcoin fell sharply overnight after trading above $72,000 on Thursday.
It was not immediately clear what caused the drop in bitcoin, which trades 24 hours a day.
Bitcoin is still up about 60% year to date, and the overnight drop came from near record highs. The cryptocurrency has climbed over the past few months, in part due to anticipation and then demand from the new bitcoin ETFs that launched in the U.S. in January.
“I think it’s a healthy move. We’re removing some of the leverage that has built up in the system,” Crypto.com CEO Kris Marszalek said on CNBC’s “Squawk Box” on Friday, adding that the selling pressure was likely coming from the options market.
Rapid rallies and steep drops have been a recurring feature of bitcoin’s history. In its previous bull market, bitcoin surged above $68,000 in November 2021 but was trading below the $20,000 mark roughly a year later.
Crypto optimists say that the volatility of the asset class should decline as bitcoin matures. The advent of the bitcoin ETFs, which makes it easier for a wider swath of investors to gain exposure to crypto, could in theory help reduce that volatility.