Bitcoin dropped back below $40,000, erasing almost all the gains sparked by optimism about U.S. President Joe Biden’s executive order to put more focus on the crypto sector.
The largest cryptocurrency declined as much as 7.2% to $38,894 on Thursday, falling for the first time in three days. Ether dropped as much as 5% to $2,574. Most of the top cryptocurrencies were down at least slightly in the 24 hours to 4:15 p.m. Hong Kong time, according to pricing from CoinGecko.
Bitcoin jumped as much as 11% on Wednesday amid optimism about the trajectory of U.S. regulation of digital assets, as the framing of Biden’s executive order on cryptocurrencies was made clear. Those gains proved fleeting as traders digested the news, and the token is again trading near the middle of the range where it’s spent most of the past two months.
“Although the initial reaction to the Biden digital assets executive order was ‘it’s not as bad as it could have been,’ a closer look at the details shows that it does not remove potential regulatory risk,” said Jeffrey Halley, senior market analyst at Oanda Asia-Pacific.
Futures on the S&P 500 and Nasdaq 100 indexes turned lower around the same time as Bitcoin’s price took a second leg down. The cryptocurrency has been relatively strongly correlated with U.S. stocks since the beginning of the Covid-19 pandemic.