Bitcoin is recovering after massive sell-off
The extremely volatile cryptocurrency suffered a 35% free-fall in just the last few days.
Bitcoin’s value has plunged by more than one third in just a few days, free-falling from a lofty all-time high of nearly $20,000 on Sunday, down to just $12,200 on Friday, according to coindesk’s Bitcoin Price Index.
The cryptocurrency’s value dropped around 35% over a five day period. However, testament to its extreme volatility, the digital currency’s value has gained almost $1,000 (7%) in just the last hour alone.
The reasoning behind the significant sell-off remains inconclusive. The cryptocurrency has seen a sizable crash every quarter, which has been followed up by even greater gains. But this week has been particularly unstable.
Analysts suggest the price could experience more volatility as 2017 nears to a close. OnChainFX data, which charts price developments for cryptocurrencies, reveals that every one of the top-20 digital coins by market capitalization hit an all-time high over the past five days but many also posted declines in the last 24 hours.
CBOE, the largest US options exchange, and the Chicago Mercantile Exchange both launched bitcoin futures trading earlier this month, offering investors the chance to bet on whether value will rise or fall over time.
Long-term future pricing has been heralded by some investors as a considerable vote of confidence for virtual currencies, potentially paving the way for less market volatility and further increased investment over time.
However, UBS Wealth Management remains unconvinced as to whether bitcoin and other digital currencies have a shelf life. The currency’s legitimacy is a hotly debated topic among economists and trading strategists.
From early 2018, some digital rental payments companies will allow customers to make lease payments using digital currencies – including bitcoin, litecoin and ethereum – either online or via mobile payment apps.
Additionally, the wealth bitcoin is generating for early adopters is also consuming a huge amount of energy.
Bitcoin is hovering around $13,000 as of 11:45 a.m. December 22, according to coindesk’s Bitcoin Price Index.
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