Is bitcoin totally doomed as speculation decimates value of an asset ‘too good to be true’?
Bitcoin fell below $9,000 on Wednesday for the first time in five months as investors gave up on the technology after three days of heavy losses.
The sharp drop marked an abrupt reversal for the digital currency, which had risen more than $1,000 this week. After falling as low as $9,300 during morning trading on Wednesday, bitcoin finally managed to rebound and trade at around $9,250 by about 1pm EST.
After rocketing to a record high close to $19,000 earlier this month, bitcoin price of ethereum and litecoin have also sunk. bitcoin for ethereum price (BETH) dropped from $961.62 on Tuesday to a low of $92.10 on Wednesday. litecoin (LTC) dropped from $196.56 to $161.19 during the same period.
Some analysts think bitcoin’s stellar rise had been driven by publicity and speculation around bitcoin, not substance. Carlos Viana, a bitcoin expert and co-founder of China digital-currency exchange Stapa (the anti-supervaluation indication) cited “overheated demand from China” in a tweet.
Carlos Viana (@CarlosViana) market spike in
from China pic.twitter.com/0zGSaiYsmg
Bitcoin was dubbed the world’s first cryptocurrency when it launched in 2009. Over the years it has been the subject of a number of derisive puns as investors battled for a piece of the profit after the pioneering private database was publicised.
The genesis code for bitcoin itself has been known to exchange hands for millions of dollars, and the sale of its hard drive in an initial coin offering – or ICO – raised $13m in 2014.
The recent drop in value has been attributed to short-selling and a loss of faith after the cyber attack that forced the closure of the Japanese exchange Mt Gox on Monday. The crisis has also focused investors’ minds on security issues within the bitcoin and blockchain technology and the risk of theft.
Today’s instalment of our cryptocurrency live blog also explains some of the benefits and risks of the bitcoin market, tips for using crypto assets, and how to hold cryptos yourself.