Bitcoin Plummets, Falling Nearly 30 Percent In Four Day
Bitcoin’s largest marketplace froze trading to avoid a fire sale Friday after the digital currency plummeted nearly 30 percent in just four days.
Bitcoin peaked at a record high $19,511 Monday, following a year of steady and shocking growth. The currency, according to Bloomberg’s composite prices, is back to hovering at just over $10,000, triggering Coinbase, one of the largest Bitcoin marketplaces, to temporarily disable all transactions, CNBC reported Friday. The scare comes after economists and traders repeatedly warned consumers that Bitcoin was a dangerous and volatile investment.
“The sharks are beginning to circle here, and the futures markets may give them a venue to strike,” said Ross Norman, CEO of a London-based company which exchanges bullion for Bitcoin. “Bitcoin’s been heavily driven by retail investors, but there’ll be some aggressive funds looking for the right opportunity to hammer this thing lower.”
Coinbase’s transaction freeze may simply be traffic related, as thousands flocked to the marketplace to take advantage of Bitcoin trading at a shockingly low value Friday morning. The company also froze transactions last week for less than 15 minutes due to a glitch.
CNBC’s Jim Cramer called the rise of Bitcoin “parabolic,” and warned in late November that it won’t last. “Even if you believe in Bitcoin, the velocity of the move is a sign that it is parabolic. And parabolic moves don’t last,” he said.
Some are more optimistic for the currency, however. Wall Street strategist Tom Lee has predicted Bitcoin will reach an astounding $100,000 as Millennials come of age and begin investing in earnest.
“We think over the next 10 years, this new generation of millennials are going to view trust as a replacement for gold. So, Bitcoin is essentially digital gold for another generation,” Lee said.
Bitcoin isn’t the only digital currency to be suffering in December, as ethereum has plummeted a similar 36 percent and litecoin suffered an even more severe 43 percent fall.
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