Madrid, Hong Kong
The roller coaster January for cryptocurrency investors eased for a few hours on Thursday as Bitcoin held onto gains after roaring back from its first plunge below $10,000 since December.
The world’s largest digital currency climbed 3.9 per cent to $11,822 at 7:40am in New York, Bloomberg composite pricing showed. It steadied in Asian and European trading as investors paused for breath following a frantic 24 hours in which the token swung through a $2,600 range. Rivals ethereum and litecoin rose about 2 per cent each, while Ripple jumped 17 per cent.
Criticism of the freewheeling, half-a-trillion-dollar world of digital coins issued almost daily by regulators from Russia, South Korea to the US have put investors on the edge in the new year. This has added to volatility and, in Bitcoin’s case, curbed sustained rallies seen last year.
“The regulatory crunch is coming,” said Neil Wilson, market analyst in London for online trading platform ETX Capital. “But because regulators have yet to do anything seismic, there is still plenty of buyers to be found — second-wave buyers who’d feared they’d missed out on the boom, choosing to enter the market at more attractive prices.”
Comparing the asset class to Viagra, which was discovered in heart-medicine research, a Russian central banker Wednesday said that holders of cryptocurrencies now view them not as a means of payment, but as an investment asset.
Crypto as ‘Pyramid’
“It’s absolutely clear that regulators won’t do anything to facilitate the promotion of these pyramids,” first deputy governor at Bank of Russia Sergey Shvetsov said.
Bitcoin’s gyrations in 2018 have investors, regulators and onlookers debating whether the speculative bubble has popped after a 1,400 per cent ascent last year. Jitters across the globe over a potential bloodbath helped wipe as much as $400 billion off the global market value of digital assets from its Jan. 8 high.
“This market is volatile and there is not enough capital in it to stabilise,” Darren Franceschini, chief executive with Blockchain Technologies Consulting, said in an email.
While South Korean authorities are debating a potential ban on local exchanges, China seems to be widening its crackdown on the industry.
Bixin, one of China’s larger operators for the so-called wallets that hold digital coins, said it was suspending all OTC trading and escrow trading on Wednesday, blaming “uncertainties regarding regulation policies.” No restart date was set.
