Bit­coin hits three-week low

The Star Early Edition - - BUSINESS REPORT -

BIT­COIN fell to a three-week low on Thurs­day as in­vestors took prof­its partly in re­sponse to a bear­ish report from Gold­man Sachs as well as con­cerns about a Chi­nese bit­coin miner’s plan to un­der­take a “hard fork” that will re­sult in a split in the dig­i­tal cur­rency. The vir­tual cur­rency re­lies on “min­ing” com­put­ers that val­i­date blocks of trans­ac­tions by com­pet­ing to solve math­e­mat­i­cal puz­zles ev­ery 10 min­utes. The first to solve the puzzle and clear the trans­ac­tion is re­warded with new bit­coins. Bit­coin fell as low as $2 120 (R27 073) on the Bit­stamp on Thurs­day and was last down 6 per­cent at $2 290. On the week, the cur­rency has fallen about 22 per­cent, on track for its largest weekly slide since De­cem­ber 2013. On Mon­day, bit­coin hit a record just shy of $3 000. So far this year, bit­coin re­mains up 137 per­cent. Sharp losses such as Thurs­day’s are par for the course for an as­set like bit­coin, an­a­lysts said. Over the course of its eight-year his­tory, Bit­coin has on a daily ba­sis risen as much as 18 per­cent and fallen as much as 13 per­cent. Greg Dwyer, busi­ness de­vel­op­ment man­ager at crypto-cur­rency trad­ing plat­form BitMEX, said bit­coin’s de­cline may have started last Mon­day when Gold­man Sachs an­a­lyst Sheba Ja­fari said: “The bal­ance of sig­nals are look­ing broadly heavy” for bit­coin. Ja­fari was “wary of a near-term top ahead of $3 134.” An­a­lysts said in­vestors were spooked by Chi­nese miner Bit­main’s plan to un­der­take a “hard fork” of bit­coin if a code up­grade on the cur­rency is ac­ti­vated later this year. Un­der a “hard fork”, Bit­main would cre­ate an en­tirely new ver­sion of the bit­coin blockchain, re­sult­ing in an en­tirely new bit­coin cur­rency, sep­a­rate from the orig­i­nal cur­rency. – Reuters

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