Bitcoin finds floor after worst selloff since 2015
Bitcoin clawed its way upward on Saturday along with most cryptocurrencies, halting a four- day tumble that drew worldwide attention to the unregulated $500 billion market that's frequently called a bubble.
The recovery coincided with a pause in bearish news that had snowballed since Monday and shaved 24 per cent off bitcoin's value, its biggest four-day selloff since 2015. Comments by central bankers, a decision by Litecoin's founder to sell all his holding, and a wish to reduce stakes before the holiday season fueled the plunge, strategists said.
“With holidays approaching, some people want to step away from the table, and take their chips with them,” Marc Ostwald, global strategist at London-based ADM Investor Services International, said by phone from Warsaw. “Still, I wouldn't want to put it down too much to rationality, because this is not a rational market.”
Bitcoin, the largest cryptocurrency by market value, shook the nascent trading world of digital coins on Friday when its interday plunge reached 30 per cent. The previous day, competitor litecoin recovered some of a 43 per cent intraday fall.
On Saturday, bitcoin rose 6.6 per cent to $14,978 at 11:41 am London time, compared with 24 hours earlier, according to data on coinmarketcap. No. 2-ranked ethereum climbed 6.1 per cent, and litecoin was up 12.2 per cent.
In a late-week comment that undercut confidence, Michael Novogratz, the former Goldman Sachs Group Inc. and Fortress Investment Group LLC macro trader, said he's shelving plans to start a cryptocurrency hedge fund. He predicted that bitcoin may extend its plunge to $8,000. Earlier this month he predicted it could reach $40,000 within a few months.
Growing pains in the digital-coin world and warnings emerged all week, adding to volatility.
Coinbase, one of the larger trading platforms, on Friday said all buys and sells were temporarily unavailable before they were re- enabled, according to its website. There were no incidents reported Saturday.
In South Korea, Yapian, the owner of bitcoin exchange Youbit, said Tuesday it would close and enter bankruptcy proceedings after a cyberattack that claimed 17 per cent of its total assets.
BaFin, European Union There's been a string of warnings by regulators for investors in digital coins. Felix Hufeld, president of German banking supervisor BaFin, advised consumers that trading in bitcoin would produce "bitter losers" and could result in a "total loss,” according to an interview with German newspaper Bild.
That echoed comments three days ago by the European Union's financialservices chief, Commissioner Valdis Dombrovskis, who asked the heads of the EU's three financial supervisors to update their warnings to consumers "as a matter of urgency" in light of recent market developments, according to a letter seen by Bloomberg. “Huge rises and sudden, spectacular setbacks wouldn't surprise me going forward,” ADM’s Ostwald said. “The worry is going to be, at some point, the pips are going to start squeaking. Retail investors losing money will ask, ' Why aren't you intervening to help me? And the answer is going to be, 'Well, this is a casino. On your head, be it.’ ”
The recovery coincided with a pause in bearish news that had snowballed since Monday and shaved 24% off bitcoin's value, its biggest 4-day selloff since 2015