TALES FROM A CRYPTO
‘Buried’ but it’s baaaack
After a brutal week, bitcoin finally got a bounce.
The controversial cryptocurrency yo-yoed dramatically on Friday, briefly falling below $3,000 to as low as $2,985 in the morning before rebounding in the afternoon to soar as high as $3,819 as investors digested news of a clampdown by the Chinese government on bitcoin trading.
Despite the late-Friday recovery, bitcoin is still down nearly 13 percent for the week as it has faced criticism from Wall Street and government officials alike in recent days, according to data provided by CryptoCompare.
“There might have been an overreaction that is correcting itself,” Sam Doctor, quant strategist at Fundstrat Global Advisors, told The Post.
After touching above $5,000 for the first time earlier this month, the digital currency fell as much as 40 percent as skepticism mounted over bitcoin’s eye-popping rally this year.
But Fundstrat, which is bullish on bitcoin’s long-term prospects, noted that it is behaving like most volatile asset types.
“It moves up faster, it moves down faster, and it bounces faster,” Doctor said.
Earlier this week, JP Morgan Chase CEO Jamie Dimon called bitcoin a “fraud” and its investors “speculators” at an investor conference hosted by CNBC. Even so, Dimon acknowledged limited uses for bitcoin and its underlying blockchain technology.
“If you’re in Venezuela or Ecuador or North Korea, you’re better off probably using bitcoin than using their currency,” Dimon said.
“That can’t possibly be true in the United States unless you’re speculating, and that isn’t a reason to say something has value,” he added.
Bitcoin has also been hampered in recent weeks by moves the Chinese government made to curb its use. On Sept. 4, the People’s Bank of China, along with six other Chinese government agencies, issued a joint statement explaining the government’s ban on initial coin offerings, citing their use in “illegal” activities.
BTCChina, one of China’s largest bitcoin exchanges, said Thursday that it would shut down by the end of the month as a result of the regulator’s statement.