Daily Management Review

Bitcoin Heading For Worst Week Since 2013 As It Falls Below $13,000


12/22/2017




Bitcoin Heading For Worst Week Since 2013 As It Falls Below $13,000
After its phenomenal rise to cross the $20,000 mark, cryptocurrency bitcoin lost about a third of its value in just five days as it dived below $13,000 on Friday. This week appears to be the worst for the virtual coin since 2013.
 
Bitcoin touched $19,666 at the Luxembourg-based Bitstamp exchange on Sunday and over $20,000 at other exchanges which had capped off a phenomenal year for the best-known cryptocurrency when it had seen its value rise from $1000 at the beginning of the year it noted a 20-fold increase this year.
 
But after touching $20,000, there has been a fall in the cryptocurrency virtually every day. The losses widen to the maximum on Friday. It touched as low as $12,560 at Bitstamp which was a fall of almost 20 per cent for the day. And since then, while it has risen a little, the cryptocurrency is seemingly headed for its worst week of falls since 2013.
 
“A manic upward swing led by the herd will be followed by a downturn as the emotional sentiment changes,” said Charles Hayter, founder and chief executive of industry website Cryptocompare in London.
 
“A lot of traders have been waiting for this large correction.”
 
“With the end of the year in sight a lot of investors will be taking profits and saying thank you very much and closing their books for the holiday period,” he added.
 
The week has been difficult for bitcoin. Worries about the exchanges which are trading in cryptocurrencies have been expressed more and more this week – for example, Denmark’s central bank governor called it a “deadly” gamble, the volatile and unregulated market of cryptocurrencies have been at the forefront of critics this week.
 
After being hacked for a second time in a year, bankruptcy filing was announced by South Korean cryptocurrency exchange Youbit on Tuesday.
 
There has been a sharp rise in the value of a bitcoin spin-off just hours before Coinbase, a U.S. company dealing in cryptocurrency and arguable the largest exchanges that offer digital “wallets” for bitcoins storage, expressed support for it. The company announced on Wednesday that it would investigate allegations of insider trading.
 
according to industry website Coinmarketcap, the total market value of bitcoin touched $480 billion from $650 billion just a day ago.
 
“A lot of the capital is flowing from bitcoin into alternative coins,” said Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers in Sydney.
 
Bitcoin Cash, which is an offshoot of the original bitcoin drew some investments from bitcoin, said Stephen Innes, head of trading in Asia-Pacific for retail FX broker Oanda in Singapore.
 
“Most of it is unsophisticated retail traders getting burned badly,” Innes said on bitcoin’s recent retreat.
 
It is being touted that bitcoin has been given some form of legitimacy after its future trading was launched from CME and its rival Cboe Global Markets, but even then there are many who have remained skeptical of it.
 
“Trading in bitcoin is akin to gambling, so its movements don’t follow logical patterns,” said Takashi Hiroki, chief strategist at Monex Securities in Tokyo.
 
“Unlike equities and bonds, it is not possible to calculate expected returns on bitcoin, so buying it becomes a gamble rather than an investment.”
 
(Source:www.reuters.com)






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