Bitcoin tumbles nearly 30 per cent Friday
The value of bitcoin tumbled nearly 30 per cent during a volatile session Friday, testing investors who have recently sent the cryptocurrency to astronomical heights and marking a major drop for the largest virtual currency in a highly volatile market.
Bitcoin was trading at $11,910 US just before 10 a.m. Friday, according to cryptocurrency tracker coinmarketcap.com, sending the currency down 27 per cent since Thursday. The notable price drop amounted to a nearly $4,000 dive, and was far below its all-time high, which came earlier this month at $19,783, according to a virtual currency news site.
After 11 a.m. on Friday, Coinbase, one of the largest bitcoin exchanges in the United States, announced that trading had been temporarily halted. In an update shortly after, it said that, due to high traffic, buys and sells were still disabled, as the service worked to restore availability.
The major sell-off Friday punctuates a year in which bitcoin has seen stellar growth, prompting new investors to buy in, and igniting a flurry of media attention, even as the virtual currency is known for massive price swings.
Bitcoin has risen more than 1,000 per cent this year. Some businesses, hoping to seize on the bitcoin mania, have changed their names to include the word blockchain, the technology that undergirds the virtual currency.
On Thursday, the beverage company Long Island Iced Tea said that it’s renaming itself Long Blockchain. Its stock price tripled soon after. Another company, in Britain, appended blockchain to its name in October and saw its stock price rise nearly 400 per cent.
Earlier this month, the cryptocurrency joined the financial world’s mainstream when Chicago-based CME Group and the Chicago Board Options Exchange began trading bitcoin futures, contracts that allow people to buy and sell assets at a predetermined price at some point in the future.
TD Ameritrade, one of the largest retail brokerages in the country, said it would allow clients to begin trading bitcoin futures on the CBOE this week.
It’s unclear what led to the dive Friday, but some experts have been highly critical of bitcoin despite its prominent rise and astounding returns, and perhaps because of its notorious volatility.
UBS has called bitcoin a “speculative bubble” and JPMorgan Chase’s CEO Jamie Dimon has said that bitcoin is a “fraud” that “won’t end well.” And on Thursday, Bank of Japan governor Haruhiko Kuroda called bitcoin’s price surge “abnormal,” according to Bloomberg.