Crypto market plunges $60 billion as bitcoin rout intensifies

Digital currencies have suffered massive falls this week. Photo / 123RF

The price of bitcoin plunged by nearly US$1000 ($1521) this week to around US$6400 following reports Goldman Sachs was backing away from plans to launch a cryptocurrency trading desk.

"Crypto bulls are feeling the doom and gloom," ThinkMarkets chief market analyst Naeem Aslam said in a note.

"The price of bitcoin is threatening this year's low once again (US$5887) and this isn't a good sign at all."

The 13 per cent decline dragged down the rest of the crypto market, with the total market capitalisation of more than 1900 digital currencies tracked by Coinmarketcap falling by about US$40 billion ($60.8b).

Bitcoin had rallied slightly to US$6500 at the time writing after Goldman Sachs chief financial officer Martin Chavez dismissed the reports as "fake news".

Chavez was reported by CNBC as telling a tech conference in San Francisco the investment bank was still working on a bitcoin derivative because "clients want it".

Last month, Finder co-founder Fred Schebesta revealed his plan to create the "first crypto bank of Australia". Schebesta said the interest now was actually "so much higher" than during bitcoin's manic rise in 2017.

"Just because the price of bitcoin has gone down and people feel angry, that doesn't reduce the interest," he said. "The interest has boomed."