Bitcoin falls 30pc, posts worst week since 2013 | The Daily Star
12:00 AM, December 24, 2017 / LAST MODIFIED: 12:00 AM, December 24, 2017

Bitcoin falls 30pc, posts worst week since 2013

Bitcoin plunged by 30 percent to below $12,000 on Friday as investors dumped the cryptocurrency after its sharp rise to a peak close to $20,000 prompted warnings by experts of a bubble.

After falling to as low as $11,159, it recouped some losses to trade above $14,000 on the Bitstamp platform, down 9 percent on the day. It is down around 25 percent this week, its largest weekly loss since April 2013.

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It capped a brutal week that had been touted as a new era of mainstream trading for the digital currency when bitcoin futures debuted on CME Group Inc, the world's largest derivatives market last week.

Friday's fall bled into the US stock market, where shares of companies that have lashed their fortunes to bitcoin or blockchain - its underlying technology - took a knock. Long Blockchain Corp, Overstock.com Inc, Riot Blockchain Inc and Marathon Patent Group Inc lost between 2 percent and 15 percent. The biggest and best-known cryptocurrency has risen around twentyfold since the start of the year, climbing from less than $1,000 to as high as $19,666 on the Luxembourg-based Bitstamp exchange on Sunday and to over $20,000 on other exchanges. But it has fallen each day since.

In the futures market, bitcoin one-month futures on Cboe Global Markets were earlier halted due to the steep price drop, while those trading on the CME hit the limit down threshold.

“The crypto markets have experienced several flash crashes over the past few years but we do believe there has been some overvaluation in the market, particularly over recent months,” said Jamie Burke, chief executive officer at venture capital firm Outlier Ventures.

“It's much more likely this is a natural correction following over-exuberant market sentiment.”

On Friday, Mike Novogratz, the former macro hedge fund manager at Fortress Investment Group, told Bloomberg he had halted plans to launch a crypto-currency hedge fund.

“We didn't like market conditions and we wanted to re-evaluate what we're doing,” he told Bloomberg.

His Galaxy Digital Assets Fund was due to start on Dec 15, but he called clients on Dec 12 and told them he had changed his mind, Novogratz said in an interview with Bloomberg.

Novogratz told Reuters in November he hoped to raise about $500 million, making it the largest fund of its kind.

Warnings about the risks of investing in the unregulated market have increased - Denmark's central bank governor called it a “deadly” gamble - and there have been worries about the security of exchanges on which cryptocurrencies are bought and sold.

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