The price of bitcoin has plunged by almost 30% in a matter of days, its worst drop since 2013, following a series of issues with online cryptocurrencies and a rush of sales as we entered the Christmas period.
The volatile cryptocurrency has fizzled out as 2017 nears its end but after a remarkable year another spike has not been ruled out in the coming weeks according to some observers.
Bitcoin’s week-long slump saw a drop of more than US$2,100 of its price in a matter of hours. The cryptocurrency is down more than 28% from its all-time high above US$19,500 in December.
Despite its recent flop, the currency was still well up on the year, rising from about US$900 in January to about US$13,900, as at December 22.
According to the the Coinbase app at the time, the price of bitcoin was trading at US$13,900, a fall of almost 30% in five days.
It has been a particularly troubled week for bitcoin, in which, according to various reports, a cryptocurrency exchange went bust in South Korea following a cyberattack, knocking its price.
Coinbase, another exchange based in the US and one of the most popular bitcoin apps, also said it was opening an investigation into sharp price increases in bitcoin alternative bitcoin cash
Coinbase announced it would start trading bitcoin cash, but after a spike of 117% and reputed concerns over potential insider trading the app has suspended trading in bitcoin cash indefinitely leading to a plunge
Bitcoin has been no stranger to volatile price swings this year, as its steady climb to record levels has overcome a number of short-term price plunges.
US tech pioneer John MacAfee has seen all of his bitcoin predictions come true and as a result is seen by many of the one of the key spokespeople for cryptocurrency.
MacAfee has been predicting a rise in bitcoin price up to US$20,000 by the year end and, according to his tweets today, he is not concerned about the latest plunges.
‘Has the bubble burst?’
Neil Wilson, a senior market analyst at ETX Capital, told The Guardian: “Has the bubble finally popped? It’s hard to see the bell tolling just yet. Large price swings have become so normal that it’s hard to decide – we can easily see this market bounce back in very short order.
“Whilst there have been some hacks, public infighting in the mining community, lots of rumoured forks and regulatory pressure building on some fronts, this is likely to be a simple bout of risk-off selling as investors rebalance towards year-end.
“It looks like it’s time to cash in the gains and spend the winnings on a bumper Christmas.”
Thursday’s price drop coincided with the start of the Asian trading day, a pattern reflected throughout this week. One reason for the Asian sell-off may be worries following Tuesday’s hack of a bitcoin exchange in South Korea — with some concerned that it may have been by North Korea — resulting in Youbit exchange owner Yaipan losing about 17% of its total assets.
Other cryptocurrencies were also hit hard Thursday night, with ether — which runs on the Ethereum network — down about 8% to US$758 and bitcoin’s rival spin-off, bitcoin cash, down more than 20% to US$2,969, according to CoinMarketCap.com.
It has not all been bad news for bitcoin this week.
The Chicago Mercantile Exchange launched its own bitcoin futures trading on Monday, according to The Guardian, following in the footsteps of the Chicago Board Options Exchange.
US regulators approved futures trading in bitcoin earlier this month and Goldman Sachs is reportedly gearing up to enter the market.
The JP Morgan boss, Jamie Dimon, has branded Bitcoin a fraud, but Christine Lagarde, the head of the International Monetary Fund, said “it may not be wise to dismiss virtual currencies”, The Guardian report added.