Bitcoin reclaims US$40,000 as crypto volatility lingers

Bitcoin climbed back above US$40,000 on Wednesday for the first time this week, as recent volatility in the cryptocurrency market showed few signs of dampening down.

FILE PHOTO: Representations of the virtual currency Bitcoin stand on a motherboard in this picture illustration taken May 20, 2021. REUTERS/Dado Ruvic/Illustration

LONDON: Bitcoin climbed back above US$40,000 on Wednesday for the first time this week, as recent volatility in the cryptocurrency market showed few signs of dampening down.

Bitcoin jumped as much as 6.5per cent to US$40,904. Smaller coins, which tend to rise and fall with the largest cryptocurrency, also gained, with ether climbing over 7.5per cent to over US$2,906.

Still, bitcoin is down 30per cent this month, and has lost over 37per cent from its record high of almost US$65,000 hit in April. It has gained over 40per cent this year, however.

Among the drivers of bitcoin’s recent slump have been fears of a crackdown in China on the emerging sector, as well as concerns over the environmental impact of bitcoin production, an energy-intensive process known as mining.

Bitcoin plumbed US$30,066 last week, its lowest since January, in highly volatile trading.

China’s northern region of Inner Mongolia escalated a campaign against cryptocurrency mining on Tuesday, publishing draft rules to root out the business, days after Beijing vowed to crack down on bitcoin mining and trading.

(Reporting by Tom Wilson; editing by Thyagaraju Adinarayan)