Bitcoin’s rollercoaster week climaxes with 30pc collapse in price

BITCOIN tumbled as much as 30pc yesterday, as fears that the digital currency’s astounding run could be over took hold.

The cryptocurrency, which this month reached an all-time high of nearly $20,000, plunged as low as $10,835 after a week of warnings from global investors and high-profile hacks on currency exchanges. It is widely believed the soaring popularity of Bitcoin Cash, a clone that shares its name and many features, might be to blame.

Coinbase – one of the largest cryptocurrency exchange websites – temporarily disabled buying as its servers struggled to cope with the high traffic.

Bitcoin’s price started to drop earlier this week after Coinbase began selling Bitcoin Cash.

The cryptocurrency’s staggering rise has become something of a rollercoaster ride. While the drop appears significant, observers have assured those who have invested that it has only dipped to a price seen two weeks ago. Late last night, it was back at $14,362, down 7.7pc on the day. However, it does signify how fickle digital coins can be, with Bitcoin’s rivals predicted to flourish in the new year.

“There are clear divergences happening in the market and the community is not as behind Bitcoin as before, and we could see other rivals catching up quicker in the new year,” said Neil Wilson, senior market analyst at ETX Capital. But Michael Jackson, ex-chief operating officer of Skype and partner at venture fund Mangrove Capital, said: “The vast majority of long-term holders of Bitcoin are still way in the money and have shown no sign of cashing out. We see the exit of short-term speculators and we have seen it before. The fundamentals are still in place and there is no reason why the Bitcoin ecosystem should not continue to develop.”

Now almost a decade old, Bitcoin has struggled to cope with the surge in price and popularity that has seen its value rise from $1,000 at the start of the year.

Amid its ongoing popularity, many financial sector analysts and banking leaders have warned against buying Bitcoin, with JP Morgan boss Jamie Dimon describing it as “fraud”.

There have been comparisons to the dotcom bubble of the early 2000s, when technology stocks lost billions in value and even to the alleged “Beanie Baby bubble”, when rumours spread limited-edition plush toys would make their owners millionaires in the future.