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Abu Dhabi, UAEMonday 17 December 2018

Bitcoin tumbles below $14,000 as investors face `reality check'

The drop comes amid concern that an offshoot is becoming a stronger rival to the more well-known cryptocurrency

A man walks past Bitcoin ATMs in Wanchai, Hong Kong. Market analysts remain worried about the volatility of the cryptocurrency, which has seen sharp increases this year.  EPA/JEROME FAVRE
A man walks past Bitcoin ATMs in Wanchai, Hong Kong. Market analysts remain worried about the volatility of the cryptocurrency, which has seen sharp increases this year. EPA/JEROME FAVRE

Bitcoin fell as much as 15 per cent on Friday, extending its loss from its intraday high this month to more than 30 per cent.

The digital currency dropped to as low as $13,048 before trading at $14,079.05 as of 8am in Dubai. Bitcoin, which peaked at $19,511, is still up more than 1,300 per cent this year.

Investors are having a "reality check," said Stephen Innes, head of trading for Asia Pacific at Oanda Corporation. "At the heart of the matter was a frenzied demand for coins with limited supply has now led to unsophisticated investors holding the bag at the top."

Bitcoin’s drop comes amid concern that an offshoot is becoming a stronger rival to the more well-known cryptocurrency. Bitcoin cash, which emerged earlier this year amid a split between factions over proposed software upgrades, was added to Coinbase Inc.’s offerings this week.

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There are growing signs of mania for anything cryptocurrency related.

Long Island Iced Tea Corporation shares rose as much as 289 per cent after the unprofitable Hicksville, New York-based company re-branded itself Long Blockchain Corporation. Bank of Japan Governor Haruhiko Kuroda said on Thursday bitcoin isn’t functioning like a normal means of payment and is being used for speculation.

Banks are also sensing opportunity. Goldman Sachs is setting up a trading desk to make markets in digital currencies such as bitcoin, according to people with knowledge of the strategy. The bank aims to get the business running by the end of June, if not earlier, two of the people said.