Rollercoaster ride for Bitcoin as China gives it a stay of execution

BITCOIN fought back on the markets yesterday after cryptocurrency exchanges under threat of closure in China were given a short stay of execution by authorities in a rollercoaster week for the so-called digital currency.

The volatile cryptocurrency crashed 29pc in less than three days after Jamie Dimon, the JP Morgan boss, described Bitcoin as “worse than tulip bulbs”, and one of China’s largest bitcoin exchanges, Btcchina, said that it would stop trading at the end of the month as the Asian powerhouse’s authorities step-up their curbs on digital currencies.

After recording an all-time high at just below $4,900 per bitcoin earlier this month and spiralling as low as $2,975 yesterday, the cryptocurrency rallied to pare $400 of its losses in under an hour after two of the largest platforms, Huobi and Okcoin, were given an extra month before closing.

Increased regulation of digital currencies could stem the wild volatility, according to Dr Catherine Mulligan, co-director of Imperial College’s Centre for Cryptocurrency Research and Engineering.

She said: “As more governments implement regulations in this area, I believe that the price volatility will settle down.”

The changes are a “sensible step by the Chinese authorities who no doubt want greater control”, argued Bitcoin expert and partner at Mangrove Capital Partners Michael Jackson.