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    Bitcoin falls as much as 10% as risky assets tumble globally, regulatory concerns intensify

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    Naija247news Editorial Teamhttps://www.naija247news.com/
    Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

    The price of bitcoin dropped sharply Monday as investors began shedding risk amid a global equity markets decline.

    While bitcoin is often called a safe haven asset, the growing reality is its price tends to go down amid broader declines in risk assets. Bitcoin’s rally has so far coincided with the broader risk-on rally and much like stocks, bitcoin’s price also usually experiences a September slide.

    Bitcoin lost as much as 10% Monday morning. It was last down 7% and trading at $43,849.85, according to Coin Metrics. The broader crypto market is in the red too, with ether last down 8% to $3,053.15.

    “This sell-off is the continuation of a well-established pattern where traders cash in their riskier assets to cover margin calls or sit on the sidelines until markets calm down and they feel more comfortable going back into riskier positions,” Leah Wald, CEO at crypto asset manager Valkyrie Investments, told CNBC. “If ever bitcoin had the opportunity to establish itself as a safe haven or as digital gold, with U.S. companies also signaling their earnings calls are going to reveal poor results, now feels like the time.”

    Global equity markets are sliding as investors fear spreading risk from a shakeout in China’s property market tied to highly indebted developer Evergrande. Investors are also focused on the the Federal Reserve and whether it will signal its readiness to start removing monetary stimulus from the economy. The central bank will begin its two-day meeting Tuesday.

    Earlier this month it rose above $50,000, a key psychological resistance level for traders. The cryptocurrency is below its 50-day moving average of $46,514, which analysts and traders look to for a change up or down and to get a sense of the intermediate-term trend. Investors should “wait until tomorrow’s close to decide whether to reduce exposure and manage risk of a more prolonged pullback,” Katie Stockton, managing partner at Fairlead Strategies, told CNBC.

    The crypto decline comes as uncertainty about the regulation of stablecoins intensifies. The Financial Stability Oversight Council could designate them as systemically risky, the New York Times reported over the weekend, which could subject them and their operators to heavy regulation.

    The President’s Working Group on Financial Markets is working up a report on stablecoins and the Fed is expected to put out a report on central bank digital currencies this month that could touch on stablecoin risks.

    While bitcoin was sliding its older rival, gold, was in the green with futures up 0.4%.

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