After big gains, bitcoin dives 20% in 10 hours
Bitcoin lost almost a fifth of its value in 10 hours on Friday, having surged more than 40 per cent in the preceding 48 hours, sparking fears the market may be heading for a price collapse.
LONDON/TOKYO: Bitcoin lost almost a fifth of its value in 10 hours on Friday, having surged more than 40 per cent in the preceding 48 hours, sparking fears the market may be heading for a price collapse.
In a hectic day on Thursday, bitcoin leapt from below $16,000 to $19,500 in less than an hour on the US-based GDAX, one of the biggest exchanges globally, while it was still changing hands at about $15,900 on the Luxembourg-based Bitstamp.Having then climbed to $16,666 on Bitstamp at around 0200GMT on Friday, it tumbled to $13,482 by around 1200 GMT—aslide of more than 19 per cent.
As of 1320 GMT it had recovered to around $14,400, stilldown 13 per cent on the day. "This correction is an appropriate one after such frenziedtrading," said Nigel Green, founder and chief executive offinancial consultancy de-Vere Group, in a note to clients. "We should expect to see bitcoin see-sawing in coming weeks."
"Today's digital world needs cryptocurrencies. One or two of the existing ones will succeed. Whether it's bitcoin or not remains to be seen," he added.As bitcoin slumped, other cryptocurrencies climbed. Ethereum, the second-biggest, was up almost 6 per cent by 1320 GMT, according to trade website Coin marketcap.
For the week, bitcoin was still up almost a third. Since the start of October, bitcoin has more than tripled in price—its strongest quarterly performance since 2013.
And since the start of the year, it has increased by about15 times in value— a rise that led to growing concerns the bubble would burst in dramatic fashion.The rise has drawn in millions of new investors. So far thisweek, more than half a million new users have opened walletswith retail-focused bitcoin wallet provider Blockchain, the firmsaid, doubling the total number of users to 20 million sincelast year.
Some market-watchers say the most recent lurch higher inbitcoin can be explained by the coming launch of bitcoin futureson major derivatives exchanges. The Chicagobased Cboe GlobalMarkets exchange will launch a futures contract on Sunday, to befollowed by CME Group and Nasdaq.