Abu Dhabi, UAEMonday 24 June 2019

Bitcoin roller coaster ride gets even more extreme

Cryptocurrency loses almost a fifth of its value in one day but rebounds as user figures rocket

A bitcoin sign in Hong Kong. The digital currency lost almost $2,000 in 24 hours before rallying again. Anthony Wallace/AFP
A bitcoin sign in Hong Kong. The digital currency lost almost $2,000 in 24 hours before rallying again. Anthony Wallace/AFP

Bitcoin slid to as low as US$9,000 in volatile trade on Thursday, 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 per cent on Thursday 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 about 4 per cent on the day. It was at $9,464 at 8.05pm UAE time on the DailyFX site on Thursday.

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," said Charles Hayter, the founder of CryptoCompare.com.

"Volatility is in the market at the moment and that means both positive and negative moves."

The latest fall has tempered an astronomical rise for the cryptocurrency in recent months - bitcoin was up almost 1,100 per cent 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 Donald Trump has been prominently in the news this week.


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Several large market exchanges including Nasdaq, CBOE Holdings and CME - 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 that the investment bank was exploring a new trading operation dedicated to cryptocurrencies.

Bitcoin's rapid ascent has prompted warnings from a stream of prominent investors that it had reached bubble territory, while the Bank of England deputy governor on Wednesday said investors should "do their homework" before investing in the digital currency.

New users of bitcoin have rocketed in recent weeks, along with the cryptocurrency's own rise.

London-based Blockchain.info, one of the biggest global bitcoin wallet-providers, said on Wednesday it had added a record number of new users on Tuesday, with more than 100,000 customers signing up, taking the total number to more than 19 million.

The evidence suggests that few of the users are buying bitcoin to use it as a means of exchange, but are speculating to increase their capital.

Bitcoin's fall on Thursday dragged down the prices of other cryptocurrencies in its wake, with Ethereum, bitcoin's biggest rival, falling as much as 19 per cent on the day, according to trade website Coinmarketcap.

For the month, bitcoin is still on track for a more than 40 per cent price increase.

Updated: November 30, 2017 08:17 PM