Bitcoin plunges below $12,000

Bitcoin plunged below $12,000 on Friday after losing around a third of its value in just five days, with the digital currency on track for its worst week since 2013. Bitcoin had seen a staggering twentyfold increase since the start of the year, climbing from less than $1,000 to as high as $19,666 on the Luxembourg-based BitStamp exchange on Sunday and to over $20,000 on other exchanges.

Bitcoin plunged by a quarter to below $12,000 on Friday as investors dumped the cryptocurrency in manic trading after its blistering ascent to a peak close to $20,000 prompted warnings by experts of a bubble.

It capped a brutal week that had been touted as a new era of mainstream trading for the volatile digital currency when bitcoin futures debuted on CME Group, the world’s largest derivatives market on Sunday.

Friday’s steep fall bled into the US stock market, where shares of companies that have recently lashed their fortunes to bitcoin or blockchain — its underlying technology — took a hard knock in early trading.

The biggest and bestknown cryptocurrency had seen a staggering twentyfold increase since the start of the year, climbing from less than $1,000 to as high as $19,666 on the Luxembourg-based Bitstamp exchange on Sunday and to over $20,000 on other exchanges. Bitcoin has fallen each day since, with losses accelerating on Friday.

In the futures market, bitcoin one-month futures on Cboe Global Markets were halted due to the steep price drop, while those trading on the CME hit the limit down threshold. In the spot market, bitcoin fell to as low as $11,159, down more than 25 per cent on the Luxembourgbased Bitstamp exchange, its largest one-day drop in nearly three years. For the week, it was down around a third — its worst performance since April 2013.

“After its parabolic-like rally, a crash was imminent and so it has proved,” said Fawad Razaqzada, market analyst at Forex.com in London.