FILE PHOTO: Sparks glow from broken Bitcoin (virtual currency) coins in this illustration picture, December 8, 2017. REUTERS/Dado Ruvic/Illustration/File Photo
NEW YORK: Bitcoin fell toward US$15,000 after the cryptocurrency’s biggest rally in two weeks ended a rout that wiped more than US$9,000 off the price.
The largest digital coin fell 4.6% to US$15,214 at 10:08am in New York, having earlier climbed as much as 3.6%. Among rival digital currencies, ripple extended its gains to 9.6%, while ethereum and litecoin fell 1.2% and 6.2% respectively, according to data compiled by Bloomberg.
The relatively quiet day for bitcoin comes on the heels of a five-day slump that reached 44% at its depths and took the coin below US$11,000 on Friday. Just four days earlier, it rose within striking distance of US$20,000 after a torrid advance that started in early December.
Investors continued to snap up shares in companies often seen as a safer alternative to investing directly in the cryptocurrency itself. Digital Power rose in early trading after saying it’s boosting its computing infrastructure to mine digital coins. On Track Innovation also advanced.
Bitcoin futures on the CME Group exchange slipped 3.6%.
Bitcoin’s volatility is adding to an ongoing debate about how to value the digital coin which has surged about 1,600% this year.
“Nobody knows the ultimate value of this underlying asset,” Edward Stringham, president of the American Institute for Economic Research, a Massachusetts-based research group, said on Bloomberg Television. “We cannot predict whether it’s going to be zero or US$1mil or anything in between.”
For skeptics doubting whether individuals and businesses will truly start using bitcoin as a medium of exchange -- as opposed to some officially backed digital currency -- the short-lived rebound from the past week’s selloff portends further declines.
“It’s much more likely once you’ve made a big downward movement like the one we made last week that you have a bigger and more complex correction,” Ric Spooner, a Sydney-based analyst at CMC Markets, told Bloomberg Television.
“Once a market like this one locks into those patterns it becomes pretty good” to follow via chart-based analysis, he said.
Spooner said it’s possible bitcoin could drop to US$5,700 or US$8,700 in coming months. - Bloomberg
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