Bitcoin drops below $30,000 as Delta variant triggers flight to safe havens

Bitcoin fell below $30,000 for the first time in a month on Tuesday as a global spike in the Delta variant spooked markets. (Reuters)

• Bitcoin sank as low as $29,500, a level not seen since June 22, before trading 4.1 percent lower at $29,559.10

LONDON: Cryptocurrencies sank on Tuesday, with bitcoin falling below $30,000 for the first time in about a month.
Safe-harbor currencies like the yen and dollar traded near multi-month highs against the riskier Australian dollar and British pound on Tuesday, as fears grow that a rampant coronavirus variant could upend the global economic recovery.
In cryptocurrencies, bitcoin sank as low as $29,500, a level not seen since June 22, before trading 4.1 percent lower at $29,559.10. Rival ether dropped 4.8 percent to $1,730.33, also nearing a one-month low.
The dollar touched an almost-eight-month high of $0.7317 per Aussie on Tuesday before trading at $0.7319, and changed hands at $1.36625 to sterling after hitting the highest since early February at $1.3655 in the previous session.
The fast-spreading Delta variant of the coronavirus is now the dominant strain worldwide, and has been accompanied by a surge in infections around the United States, particularly in areas where vaccinations have lagged. Meanwhile, Boris Johnson’s “freedom day” — ending over a year of COVID-19 lockdown restrictions in England — was marred by surging infections and the British prime minister’s own forced self-isolation after Health Minister Sajid Javid tested positive for the virus.
In Australia, nearly half the country’s 25 million people is living under lockdowns to quell an outbreak of the Delta variant. “What is likely concerning markets now is ... a surge in infections occurring in developed markets with high levels of vaccination,” National Australia Bank analyst Tapas Strickland wrote in a client note. “That suggests virus restrictions may need to be in place for longer,” delaying the global recovery, he said.
The euro weakened 0.1 percent to $1.17885, after dipping overnight to the lowest since early April at $1.1764. The European Central Bank announces policy on Thursday, with market participants keen to see how the monetary authority implements changes to its strategy unveiled earlier this month.
“The ECB (is) expected to reinforce its dovish policy settings at this week’s policy meeting,” giving the euro scope to soften in coming months, Rabobank strategist Jane Foley wrote in a research note. At the same time, the dollar is likely to remain supported by safe-haven demand, pushing the euro toward $1.17 by year-end, she said.