Bitcoin falls almost 20 per cent from recent peak to 1-week low

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Tokyo | Published: December 20, 2017 10:24:06 AM

Bitcoin fell more than 10 percent on Wednesday to a one-week low of $15,800 at cryptocurrency exchange Bitstamp, losing almost one- fifth of its value from a peak hit just three days ago.

Bitcoin,  digital currency, cryptocurrency exchange Bitstamp, Cboe Global Markets,  Singapore central bank, South Korea, Visa Inc, latest news on bitcoinThe digital currency has been sliding since it reached a record high of ,666 on Sunday. (PTI)

Bitcoin fell more than 10 percent on Wednesday to a one-week low of $15,800 at cryptocurrency exchange Bitstamp, losing almost one- fifth of its value from a peak hit just three days ago. The digital currency has been sliding since it reached a record high of $19,666 on Sunday, when the exchange giant CME Group launched bitcoin futures, one week after its rival Cboe Global Markets listed the world’s first bitcoin futures. “The listing of two bitcoin futures makes it easier for institutional players to trade bitcoins. Futures also enable players to go short on bitcoins, which was difficult without liquid futures,” said Makoto Sakuma, researcher at NLI Research Institute in Tokyo. The bitcoin’s monumental gains this year – its price has soared about 19 times – have spurred caution and alarm among some policymakers. Singapore’s central bank on Tuesday issued a warning against investment in cryptocurrencies, saying it considers the recent surge in their prices to be driven by speculation and that the risk of a sharp fall in prices is high.

South Korea’s Financial Supervisory Service said on Tuesday it does not consider bitcoin and other cryptocurrencies to be currencies of any kind. Japanese Finance Minister Taro Aso said on Tuesday that bitcoin had not been proven as a credible currency. However, for Japanese retail investors who are estimated to account for 30 to 50 percent of bitcoin trade worldwide, a more worrying warning may have come from a Japanese day trader guru known as Cis. The individual trader, who claims to own 21 billion yen ($186 million) in assets, tweeted over the last 24 hours that he had sold cryptocurrencies.
“Given that he has a lot of followers, his tweets could have had an impact on Japanese traders, which in turn could have moved the market,” Sakuma said.

Bitcoin has since pared some of the losses and last traded at $16,939, down 4.3 percent for the day. Its decline since Sunday is hardly a major correction for digital currency. In November, it tumbled almost 30 percent in four days from $7,888 to $5,555. In September, it fell 40 percent from $4,979 to $2,972. Many financial professionals have said bitcoin, which now has market capitalisation of about $275 billion, slightly bigger than Visa Inc, is a typical bubble, given how small the actual number of transactions are. The market is highly inefficient, with bitcoin futures trading much above cash bitcoins while the gaps of price quotes between various exchanges are also very large, they say. ($1 = 112.9400 yen)

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