Bitcoin climbed back above $40,000 (roughly Rs. 29 lakhs) on Wednesday for the first time this week, as recent volatility in the cryptocurrency market showed few signs of dampening down.
Bitcoin (price in India) jumped as much as 6.5 percent to $40,904 (roughly Rs. 29.7 lakhs). Smaller coins, which tend to rise and fall with the largest cryptocurrency, also gained, with Ether (price in India) climbing over 7.5 percent to over $2,906 (roughly Rs. 2.1 lakhs).
Still, Bitcoin is down 30 percent this month, and has lost over 37 percent from its record high of almost $65,000 hit in April. It has gained over 40 percent this year, however.
Among the drivers of Bitcoin’s recent slump have been fears of a crackdown in China on the emerging sector, as well as concerns over the environmental impact of Bitcoin production, an energy-intensive process known as mining.
Bitcoin plumbed $30,066 (roughly Rs. 21.8 lakhs) last week, its lowest since January, in highly volatile trading.
China’s northern region of Inner Mongolia escalated a campaign against cryptocurrency mining on Tuesday, publishing draft rules to root out the business, days after Beijing vowed to crack down on Bitcoin mining and trading.
HSBC CEO Noel Quinn recently said that the bank has no plans to launch a cryptocurrency trading desk or offer the digital coins as an investment to customers, because they are too volatile and lack transparency.
Europe’s largest bank’s stance on cryptocurrencies comes as the world’s biggest and best-known, Bitcoin, tumbled nearly 50 percent from the year’s high, after China cracked down on mining the currency and prominent advocate Elon Musk tempered his support.
It marks it out against rivals such as Goldman Sachs, which Reuters in March reported had restarted its cryptocurrency trading desk, and UBS which other media said was exploring ways to offer the currencies as an investment product.
“Given the volatility we are not into Bitcoin as an asset class, if our clients want to be there then of course they are, but we are not promoting it as an asset class within our wealth management business,” Quinn said.
“For similar reasons we’re not rushing into Stablecoins,” he said, referring to digital currencies such as Tether that seek to avoid the volatility typically associated with cryptocurrencies by pegging their value to assets such as the US dollar.
© Thomson Reuters 2021