The prices of Bitcoin are going through a roller coaster ride, with the cryptocurrency moving to fresh life-highs in quick succession. After smashing through $11,000, within a few hours of reaching $10,000 yesterday, the elusive cryptocurrency registered wild swings and plunged to a low of $9,009 in New York. However, it soon recovered and was trading at $10,608, data from coindesk.com showed. Earlier, Bloomberg reported that Bitcoin plunged as much as 20 per cent hours after a rally past $11,000 generated a surge in traffic at online exchanges that led to intermittent outages. “The plunge capped a wild day for the largest cryptocurrency that included a breakneck advance to a high of $11,434 before the reversal took it as low as $9,009. As of 3:36 p.m. in New York, it traded at $9,911.10, virtually unchanged from where it began the session,” Bloomberg reported.
The heaviest selling came amid reports of service outages and delays on some of the largest online exchanges. Notably, the price of Bitcoin has more than doubled in just two months time. The cryptocurrency has risen despite repeated warnings of it being a bubble, even by reputed market voices.
“The problem with bitcoin is that it could easily blow up and central banks could then be accused of not doing anything,” European Central Bank policymaker Ewald Nowotny told Reuters earlier this week. “So we’re trying to understand whether bank activity in relation to cryptocurrency trading needs to be better regulated.” The global cryptocurrency market is worth $245 billion which is tiny compared to the trillion dollar plus balance sheets of the Bank of Japan, the US Federal Reserve or the ECB.
In another incident, the rapidly surging price of Bitcoin, without any underlying asset or value-based, seems to have irked the top banker Jamie Dimon. “Bitcoin is a fraud and will blow up,” Jamie Dimon said at an event in New York in September 2017, adding, “The currency isn’t going to work.” While any cryptocurrency launched as a sovereign digital alternative to currency is legal and promises to pay the value encrypted in it, Bitcoin has no such value as it is like a digital form of private currency. Bitcoin does not have any underlying asset or a value-base.