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Bitcoin slumps more than 5%, puts ‘digital gold’ status in jeopardy
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Bitcoin slumps more than 5%, puts ‘digital gold’ status in jeopardy

Bitcoin prices on Thursday finally broke out of a recent lull, dropping as much as 6% and putting the $6,000 level back in play.

A single bitcoin BTCUSD, +0.18%  was last going for $6,202.07, down 5.5% since Wednesday at 5 p.m. Eastern Time on the Kraken exchange. Earlier in the session, the world’s largest digital currency traded to an intraday low of $6,125.75, its lowest level since Sept. 19.

The decline comes on the heels of one of the worst sessions for global equities in 2018, putting bitcoin’s “digital gold” status in jeopardy. Bitcoin proponents have argued that the cryptocurrency would be a haven in times of turmoil, just like gold, and go up in value.

That hasn’t happened so far.

“The selloff also appears to have stretched to more exotic instruments, with bitcoin neither displaying the qualities one would expect of gold 2.0, as it has been touted as by some cryptocurrency enthusiasts, or simply escaping relatively unscathed as a new and relatively uncorrelated asset,” wrote Craig Erlam, senior market analyst at Oanda.

“This truly is a widespread selloff and anything perceived as a risky asset has been in the firing line. What will be interesting is whether this will be enough to force bitcoin below $6,000 which has proven to be something of a floor for the crypto on numerous occasions this year.”

Coin Center director more upbeat on cryptocurrencies

One day after Nouriel Roubini released his prepared testimony for Thursday’s Senate Banking Committee hearing on cryptocurrencies, Peter Van Valkenburgh, the director of research at Coin Center, an independent nonprofit organization for public policy issues on blockchain and cryptocurrencies, hit back with a much more upbeat statement for the hear.

In his remarks, Van Valkenburgh stressed the infancy of the technology while touting the ability of decentralized technology to mitigate risks associated with centralized power.

“Is it perfect? No. Neither was email when it was invented in 1972,” says Van Valkenburgh, according to a transcript of his prepared remarks. “Why should we want to build more public infrastructure? Why should we embrace blockchains over corporate intermediaries… A simple reason. Because the corporate intermediaries providing today’s critical but privately-owned infrastructure are becoming fewer, larger, and more powerful, and their failures are increasingly grave.”

Roubini on Wednesday, in his public statement, referred to cryptocurrencies as “the mother of all bubbles.”

Altcoins slump to multiweek lows

Altcoins, the group of coins other than bitcoin, have fared much worse than bitcoin, with most major altcoins showing double-digital losses in Thursday trading. Ether was back below $200, trading down 11.8% at $197.30, its lowest level since Sept. 18. Bitcoin Cash BCHUSD, +1.18%  was off 13.9% to $439.70, Litecoin LTCUSD, +1.14%  was trading 10.1% lower at $51.58 and XRPXRPUSD, +7.25% was at 40 cents, down 13.6%.

Bitcoin futures ended the session well in the red. The Cboe Global Markets October contract XBTV8, +1.02% closed down 6% at $6,147.50 and the CME Group October contract BTCV8, +0.49%  finished the day down 5.6% at $6,180.

Thursday’s selloff wiped more than $15 billion off the total value of all digital currencies, according to data from CoinMarketCap.

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