Bitcoin slides amid rollercoaster ride
SYDNEY: Bitcoin hovered around US$9,600 (RM39,456) in volatile trade yesterday, after tumbling about 15 per cent from an all-time high hit this week as some money managers warned ominously of a bubble and further falls in the stratospheric cryptocurrency.
Bitcoin was last down 3.4 per cent at US$9,612.60 on the Luxembourg-based Bitstamp exchange, from a record peak of US$11,395 set on Wednesday. On Thursday, it went as low as US$9,000.
The latest slide has tempered an astronomical rise in recent months: Bitcoin had jumped almost 1,100 per cent year-to-date on Wednesday. As of 0200GMT, it was still up around 915 per cent.
One wealth manager said technical chart analysis was predicting deeper falls.
“A correction could bring bitcoin back to its previous level of chart support of US$7,500. That’s over a 20 per cent drop from its current price,” said Shane Chanel, equities and derivatives adviser at ASR Wealth. “Without everyday utility, pure speculation is driving prices at the moment. Traders are forced to use technical indicators to make buy and sell decisions.”
Despite its massive fall this week, bitcoin still ended last month 54.6 per cent higher, its best monthly performance since a near 66 per cent gain in August.
The cryptocurrency has posted monthly losses only three times this year.
Bitcoin’s rise has been fuelled by signs that the digital currency is slowly gaining traction in the mainstream investment world, as well as by higher public awareness.
Meanwhile, digital currencies like bitcoin could pose a threat to financial stability as they gain wider use, said a chief United States Federal Reserve (Fed) banking oversight official.
“The ‘currency’ or asset at the centre of some of these systems is not backed by other secure assets, has no intrinsic value, is not the liability of a regulated banking institution, and in leading cases, is not the liability of any institution at all,” said newly-installed Fed vice-chairman for Supervision, Randal Quarles. Agencies