NEW YORK: Bitcoin, shares of Tesla and a high-flying exchange traded fund (ETF) fell on Tuesday, retreating from recent rallies in a volatile session that gave investors a gut check.
It was the latest sign of a possible pause in a rally that has buoyed a broad range of assets. Investors may be growing wary of sky-high valuations, while recent rises in Treasury yields could dim the allure of stocks and other comparatively risky investments.
“We have been in a sustained rally and there was a lot of leverage in the system,” said Ty Young, cryptoasset research analyst at crypto data platform Messari, of Bitcoin. “Corrections are to be expected during a bull run and not surprising when looking at previous cycles.
Bitcoin was recently down 11 per cent at US$48,207, paring some losses after Jack Dorsey’s Square Inc said it bought around 3,318 bitcoins for US$170 million. The cryptocurrency had fallen as low as US$44,845 during the session.
Shares of Tesla, which recently disclosed a US$1.5 billion investment in the cryptocurrency, fell as much as 13.4 per cent and pared losses to end down 2.1 per cent. The ARK Innovation ETF, which counts Tesla as its biggest holding, finished 3.3 per cent lower.
Recently popular exchange-traded funds (ETFs) focused on industries such as blockchain, cannabis and renewable energy have also taken a hit in the past week-and-a-half, with some investors growing skittish…