Bitcoin swung between gains and losses, whipsawing investors amid speculation whether this year’s almost 1,000 per cent surge has been too far too fast.
The digital currency, after rallying as much as 20 per cent from its low yesterday, was down 2.4 per cent at $9,952 at 7:45am in New York Thursday, according to prices compiled by Bloomberg. It set record highs during the past three sessions.
The increased volatility follows a 21 per cent intraday slump on Wednesday that coincided with intermittent outages at cryptocurrency exchanges that stopped fluid trading. That came just hours after bitcoin had soared to a record of more than $11,000, and on the same day that Coinbase Inc, one of the world’s largest virtual currency exchanges, lost a bid to block an Internal Revenue Service probe into whether some of the company’s customers haven’t reported their cryptocurrency gains.
The problem of outages “is certainly an issue, but we should put things into proper perspective,” Mati Greenspan, senior market analyst at online broker eToro Ltd, said via email. “The sell-off is more likely just a natural outcome from the extreme volatility that is baked into this market.”
Price swings in the world’s most popular digital currency are increasing as this year’s rally captivates everyone from mom-and-pop investors to high-frequency traders and Wall Street banks. While the frenzy prompted bubble warnings from observers including Nobel laureate Joseph Stiglitz, interest among traders shows few signs of abating.
Coinbase tweeted on Wednesday that traffic on its platform reached an all-time high, even as some users reported service interruptions and delays.