Cryptocurrency value

Bitcoin volatile as cryptocurrency value drops 20% in 24 hours | Economic news

Bitcoin plunged from a new high to record a 20% drop in value in just 24 hours, with other cryptocurrencies suffering a similar fate.

Market analysts said that after hitting $ 11,395 per coin on Wednesday – with seemingly no end in sight of its meteoric rise of 1,100% so far this year – Bitcoin’s ascent ended quickly in due to a potential “fear of missing” ground at a stop.

After falling below $ 10,000 that night, the drop continued Thursday to exactly $ 9,000 on the Luxembourg-based Bitstamp exchange before regaining a little poise.

The fall coincided with warnings from major investors and regulators that unregulated digital currency should be seen as a huge financial risk.

They cited the evolution of cryptocurrencies from a nascent payment method in the digital sphere to now seen as a potential investment opportunity like gold.

Someone who bought Bitcoin on January 1 would still consider a return of around 850% if they sell on Thursday – a rate of return that would be enviable by any standard asset class.

:: Bitcoin crosses the $ 10,000 mark for the first time

This would still be the case if an investment had been made a month ago, with Bitcoin up 40%.

Neil Wilson, senior market analyst at ETX Capital, told Sky News there has been a change in behavior.

He said: “(I) guess the optimism ‘is only going to increase’ was piqued a bit by yesterday’s crisis and that strained people a bit.

“The problem is, there is no way to determine fair value in this market, so it’s all based on sentiment and the herd is moving in a way that no one has control.

“A market like this takes on its own life force and movements can be difficult to understand.

“I watch swings from $ 200 to $ 300 in the blink of an eye.

“These moves are simply impossible to explain other than by pointing out that it’s so new, not well understood, and traded in a vacuum (it doesn’t correlate to global markets the way bonds, currencies, gold, stocks are all deeply correlated). “

Bitcoin is no stranger to volatility, although its biggest supporters say the prospect of a futures market should help mitigate wild swings in its value due to the imposition of market price limits.

The CME group wants it to be launched by the end of the year while the Nasdaq has indicated that it wants to follow suit in early 2018.

XTB Chief Market Analyst David Cheetham said: “They (cryptocurrencies) remain extremely volatile compared to other products offered by these exchanges and to illustrate this point, if the CME applied the same limits of price than for S&P 500 futures, yesterday’s session would have seen the market rise and fall in limits. “