Bitcoin drops toward $60,000, Ether falls amid broad cryptocurrencies dip

Cryptocurrencies fell on Tuesday, with Bitcoin sliding toward the $60,000 level and Ether touching one of its lowest levels this month.

Bitcoin, the largest digital token, was down 4% at about $61,400 as of 1:32 p.m. in Singapore. Second-ranked Ether slid as much as 6.8%. Global crypto market cap has dropped some 7% in the past 24 hours to $2.8 trillion, according tracker CoinGecko.

“We’ve seen the U.S. infrastructure bill get signed, which has initiated a selloff from traders who are concerned about regulation and taxation,” said Hayden Hughes, chief executive officer of Alpha Impact, a platform that allows investors to copy the strategies of other crypto traders. 

He also cited concerns about China continuing its regulatory crackdown. The country will study the option of levying punitive power prices for companies that are involved in cryptocurrency mining, National Development and Reform Commission spokeswoman Meng Wei said at a press conference.

New tax-reporting requirements for digital currencies are part of the $550 billion infrastructure bill that President Joe Biden just signed into law. China, meanwhile, has imposed a broad crackdown on the crypto industry over many months, in part due to the power consumption and potential environmental fallout of Bitcoin mining.

Bitcoin has more than doubled this year, while Ether is up about sixfold. Both scaled records last week amid a fervor for digital assets driven by speculative demand and controversial arguments that they can hedge inflation risks. 

Some technical indicators had suggested the strong run in cryptos was due for a pause. Digital tokens are in any case notoriously volatile.

It “would be unusual to keep moving up without corrections,” said Vijay Ayyar, head of Asia Pacific with crypto exchange Luno in Singapore. He argued that “we’re seeing a healthy pullback” after a prolonged rally.