Bitcoin slumps 20% in one day during volatile trading

Bitcoin slid to as low as $9,000 (€7,564) in volatile trade yesterday, having lost more than a fifth of its value since hitting an all-time high of $11,395 on Wednesday.

The cryptocurrency fell as much as 8% yesterday on the Luxembourg-based Bitstamp exchange to hit $9,000 exactly, marking a fall of well over $2,000 in under 24 hours. It then edged back up to trade at around $9,400 in the hour that followed, still down roughly 4% on the day.

One market-watcher attributed the fall to outages in bitcoin exchanges and the heavy price surge of recent times. “Naturally a few of the early bitcoin traders are taking some profits off the table. Volatility is in the market at the moment and that means both positive and negative moves,” said Charles Hayter, founder of CryptoCompare.com.

The latest fall has tempered an astronomical rise for the cryptocurrency in recent months — bitcoin was up almost 1,100% year-to-date on Wednesday.

The rise has been fuelled by signs that the digital currency is slowly gaining traction in the mainstream investment world, as well as by increasing awareness.

In the past week, Google searches for ‘bitcoin’ exceeded searches for ‘Trump’ for the first time, data from Google showed, even though the US president has been prominently in the news this week.

Several large market exchanges including Nasdaq, CBOE Holdings and CME Group — the world’s largest derivatives exchange — have said they are planning to provide futures contracts based on bitcoin. Some investors have said such a development may prompt them to add the digital currency to their portfolio.

In October, Goldman Sachs chief executive Lloyd Blankfein said he was keeping an open mind on bitcoin following a media report that the investment bank was exploring a new trading operation dedicated to cryptocurrencies.

However, Nobel Prize- winning economist Joseph Stiglitz said this week that bitcoin should be outlawed.

Bitcoin’s rapid rise has led to warnings from a stream of prominent investors that it had reached bubble territory, while the Bank of England deputy governor said investors should “do their homework” before investing in the digital currency.

New users of bitcoin have skyrocketed in recent weeks.

- Abhinav Ramnarayan: Reuters


KEYWORDS: Bitcoin

 

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