Bitcoin (BTC-USD) slumped as much as 10% on Tuesday, heading back below the $60,000 (£44,612) per coin mark, and leading a wider sell-off in the cryptocurrency market.
The coin was trading at around $59,425, at the time of writing, as Twitter’s (TWTR) chief finance officer Ned Segal ruled out the company currently investing in the market, souring the recent bullish mood.
The news sent ethereum (ETH-USD), the second-largest cryptocurrency, down around 11% on the day, while other coins followed suit.
Solana (SOL1-USD), which has seen a recent surge in popularity, soaring in value by more than 15,000% since the beginning of this year, was also down by a tenth.
Overall, the value of the global crypto market tumble by about 10% to $2.7tn in the past 24 hours, according tracker CoinGecko.
Segal said investing cash holdings into crypto assets like bitcoin “doesn’t make sense” right now, pointing to price volatility and the lack of accounting rules as critical hindrances.
He said Twitter would have to change its investment policy to hold more volatile assets on its balance sheet, and that the social media giant prefers to hold less volatile assets such as securities.
Read more: What is the metaverse and Web 3.0?
However, a number of companies still hold crypto on their balance sheets, including Fintech firm Square, and software firm Microstrategy.
Segal’s comments come in the wake of a controversial cryptocurrency tax reporting requirement introduced by the $1tn bipartisan infrastructure bill, signed by US president Joe Biden on Monday.
Watch: Biden Signs Infrastructure Deal Into Law
The infrastructure bill requires brokers to provide the Internal Revenue Services (IRS) with information about traders transacting an amount of more than $10,000. This includes verification of the sender’s personal information, the social security number, nature of the transaction, and report the transaction to the government within 15 days.
But some lawyers have pointed out that when applied to cryptocurrencies, and other digital assets like non-fungible tokens (NFT), it would be almost impossible to comply with the law.
"Bitcoin’s sell-off has taken it back to levels last seen 10 days ago, hardly a plunge, more a correction of the multi-month rally,” Nicholas Cawley, analyst at DailyFX said. “Bitcoin’s average true range over the past 14 days is around $2,800, the same as today’s sell-off.
He added: “The one area of concern is that the move lower has seen bitcoin fall out of its multi-week ascending channel, turning the technical outlook from positive to neutral.
Interesting area of support around $59,500 – if this holds then we may well see bitcoin reclaim its recent losses, and look at printing a new all-time high, over the coming weeks."