Bitcoin recovers some losses after its worst week since 2013

SINGAPORE/TOKYO/NEW YORK: Bitcoin rose 15 per cent, recouping about half of the losses it sustained last week, its worst since 2013, as investors who had missed out on earlier rallies bought the world’s biggest and best-known digital currency.

While bitcoin investors and analysts believe last week’s decline in its value was a natural correction after a heady run-up in prices, there have been further warnings from market regulators and central banks.

Bitcoin fell nearly 30 per cent at one stage on Friday to US$11,159.93. At 2009GMT on Tuesday, bitcoin was up 15 per cent at US$16,030 in light trading on the Luxembourgbased Bitstamp exchange.

“The latest price move shows bitcoin is still a speculative investment. There is enormous amount of volatility there,” said Kristina Hooper, chief global market strategist with Invesco in New York.

The digital currency had risen around twentyfold since the start of the year, climbing from less than US$1,000 to as high as US$19,666 on December 17 on Bitstamp and to over US$20,000 on other exchanges.

“There is no right current price which would reflect the right current valuation,” said Andrei Popescu, Singapore-based cofounder of COSS, which describes itself as a platform that encompasses all features of a digital economy based on cryptocurrency.

“Taking profit is right, while buying into a long term projection is also right. You don’t have to be right in this market, just less wrong than the rest,” Popescu said.

Critics have pointed to bitcoin’s design flaws and hacks of digital ‘wallets’ in which bitcoins are kept as an alternative to traditional currencies.