Bitcoin tumbles as stellar run for digital tokens loses footing

SYDNEY: Bitcoin slumped Friday bringing this month's spirited surge to a halt and taking rival coins down with it.

The downdraft came after the world's largest currency more than doubled in 2019, with many participants struggling to pinpoint reasons for the rally.

Bitcoin slid as much as 14%, before trimming that loss to 5.5%, trading at US$7,253 as of 10.19am in London.

Ethereum, Bitcoin Cash and Litecoin were down about 5%-6%. The Bloomberg Galaxy Crypto Index tumbled 8.4%, heading for its largest one-day slide in a month.

Speculation over what underpinned the early-May surge in the anonymously owned has run from a possible squeeze on short positions to investor relief that recent hackings and scandals weren't disrupting the broader market.

Of particular note was conjecture that stronger buying of Bitcoin – the most stable asset – came from sellers of Tether, the once-stable intermediary coin on crypto platforms whose promoters recently said it was no longer backed by US dollars in a 1-to-1 ratio.

Last month the New York attorney general accused Tether and giant crypto exchange Bitfinex last month of participating in a cover-up to hide losses of about US$850 million.

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