Bitcoin lost almost a fifth of its value in 10 hours on Friday, having surged more than 40 per cent in the preceding 48 hours, sparking fears the market may be heading for a price collapse.
In a hectic day on Thursday, bitcoin leapt from below $16,000 (€13,600) to $19,500 (€16,570) in less than an hour on the US-based GDAX, one of the biggest exchanges globally, while it was still changing hands at about $15,900 (€13,500) on the Luxembourg-based Bitstamp .
Having then climbed to $16,666 (€14,164) on Bitstamp early on Friday, it tumbled to $13,482 (€11,458) by lunchtime – a slide of more than 19 per cent. It was last down 9.3 per cent at $15,091.97 (€12,826.51) on BitStamp.
Future
Bitcoin pulled back ahead of the Chicago-based Cboe Global Markets exchange's launch of a futures contract on the digital currency on Sunday, to be followed by CME Group the next week.
Craig Erlam, senior market analyst, at OANDA in London said investors may have taken profits on their bitcoin gains ahead of the Cboe launch, which could open the door to short speculators who believe the price has risen far too quickly.
As investors braced for the Cboe launch, some of the big US banks, including JPMorgan Chase and Citigroup, will not immediately clear bitcoin trades for clients once investors start trading futures contracts, the Financial Times reported on Friday, citing people familiar with the matter.
– Reuters
