COVID-19: Bitcoin tumbles as new variant sees riskier assets dumped

Bitcoin, the largest digital currency, fell as much as 7.8% to $54,377, its lowest since Oct. 12.

 A coin representing the bitcoin cryptocurrency is seen on computer circuit boards in this illustrative picture (photo credit: REUTERS)
A coin representing the bitcoin cryptocurrency is seen on computer circuit boards in this illustrative picture
(photo credit: REUTERS)

Bitcoin tumbled almost 8% on Friday after the discovery of a new, potentially vaccine-resistant coronavirus variant saw investors dump riskier assets for the perceived safety of bonds, the yen and the dollar.

Bitcoin, the largest digital currency, fell as much as 7.8% to $54,377, its lowest since Oct. 12. It was on track for its biggest one-day drop since Sept. 20.

Scientists said the variant, detected in South Africa, Botswana and Hong Kong, has an unusual combination of mutations and may be able to evade immune responses or make it more transmissible.

"The spread of (the variant), especially to other countries, could wither investor appetite further," said Yuya Hasegawa at Toyo-based exchange Bitbank. "BTC's upside will likely be limited and the market should brace for further loss."

Bitcoin hit an all-time high of $69,000 earlier this month as more large investors embraced cryptocurrencies, with many drawn to its purported inflation-resistant qualities. Others have piled into the digital token on the promise of quick gains.

Representations of virtual currency Bitcoin are seen in this picture illustration (credit: REUTERS)Representations of virtual currency Bitcoin are seen in this picture illustration (credit: REUTERS)

Yet it has remained highly volatile, drawing questions over its suitability as a stable store of value.

Smaller coins, which tend to move in tandem with bitcoin, also fell.

Ether, the second biggest by market capitalization, slumped as much as 11.6% to its lowest in a week. It was last at $4,070, down almost 18% from its record high hit on Nov. 10.