Investing.com-- Bitcoin fell on Tuesday, extending losses and headlining declines among broader cryptocurrencies as risk sentiment soured amid increased geopolitical tensions and uncertainty over U.S. interest rates.
Bitcoin was also subject to a heavy dose of profit-taking after making new highs above the coveted $100,000 level last week. Traders were also seen locking in gains in most other cryptos.
The world’s biggest cryptocurrency fell around 1% to $98,129.0 by 09:08 ET (14:08 GMT).
Global risk appetite was dented by heightened geopolitical tensions in the Middle East, after rebel forces overthrew President Bashar al-Assad’s government. Wall Street indexes fell on Monday.
Bitcoin, crypto contend with profit-taking as Trump cheer cools
Crypto markets were hit by a wave of profit-taking as traders awaited more cues on what incoming President Donald Trump’s plans for crypto policy will entail.
Traders had taken positive cues from the President-elect’s nomination of several pro-crypto candidates for key cabinet and regulatory positions- most notably for Paul Atkins to replace Gary Gensler as the Securities and Exchange Commission Chair.
But markets were now awaiting more tangible cues on policy, with Trump set to take office in just over a month. The President-elect had promised to make America the “crypto capital” of the world.
But doubts emerged in recent sessions over just how much regulatory support Trump could provide. Analysts largely dismissed the prospect of a Bitcoin Strategic Reserve under Trump.
Bitcoin has also fallen into a $90,000 to $100,000 trading range in recent weeks, having only briefly notched a record high of over $103,000 last week.
Google quantum computing breakthrough could present crypto risks
Sentiment towards crypto markets was also rattled by Google (NASDAQ:GOOGL) announcing a breakthrough in quantum computing with a next-generation chip called Willow, enabling it to solve extremely complex problems.
Further breakthroughs in quantum computing could undermine the cryptographic security measures of crypto, given that they would likely trivialize the otherwise complex processes needed to generate crypto tokens.
Consulting firm Deloitte said in a study that at least $40 billion worth of Bitcoin could be vulnerable to a quantum attack.
However, while Google’s Willow chip marks progress in quantum computing, its 105 qubits remain far from the millions required to challenge Bitcoin's cryptographic defenses, Bernstein analysts, led by Gautam Chhugani, noted in a Tuesday report.
The Elliptic Curve Digital Signature Algorithm (ECDSA) secures Bitcoin’s private keys and digital signatures, while SHA-256 maintains ledger integrity and supports mining through proof-of-work.
“Should Bitcoin contributors start preparing for the quantum future? Yes, but any practical threat to Bitcoin seems to remain decades away,” the analysts wrote, adding that discussions around transitioning to quantum-resistant encryption are already underway.
Crypto price today: altcoins slide in tandem with Bitcoin
Broader crypto prices largely tumbled on Tuesday, tracking losses in Bitcoin.
World no.2 crypto Ether slid 4.5% to $3,716.37. World no.3 token XRP slid over 10% to $2.18. XRP was one of the best performers in recent sessions on hopes that the SEC will drop its long-running lawsuit against issuer Ripple.
Solana, Cardano and Polygon sank between 5% and 12%, while among meme tokens, DOGE slumped roughly 8%.
Ambar Warrick contributed to this report.