Bitcoin sinks below $15k while ethereum nears its all-time high
After a brief rally that began last night, bitcoin sank back below $15,000 today, but ethereum rose to $1,215, nearing its highest ever level.
Bitcoin’s price dropped as much as 10 per cent yesterday, but ethereum regained its spot as the second most valuable cryptocurrency by market cap after Ripple dropped off of a recent high.
“Bitcoin continues to be as volatile as ever,” said Craig Erlam, senior market analyst at Oanda.
At the time of writing, bitcoin was down close to two per cent at $14,718.
He added: “I wonder whether the sell-off over the festive period has knocked speculators confidence in it to make the kind of recoveries we saw at times last year.
“The inability to make these kinds of recoveries may just be temporary and a period of stability may be sufficient to draw traders back in but I wonder whether another correction may take place before that happens.”
Naeem Aslam, chief market analyst at Think Markets, said bitcoin is at an important junction due to regulatory concerns, though he does not expect a material impact on its price.
“South Korea wants to tighten the regulatory screw again by looking at some specific accounts and China wants to limit the bitcoin mining operation. But these aspects have proven only a blip for bitcoin and nothing more.”
Aslam was also optimistic about a price rebound. “Of course, one may say that bitcoin is a bubble and it will burst, but the only reality about bubbles is that once they burst, they never come back again. For bitcoin, we have seen several massive price crashes over time, however, the price has bounced back up.”
The price volatility came a week before the first bitcoin futures were due to expire.
The Chicago Board Options Exchange (Cboe) and the Chicago Mercantile Exchange (CME) both launched bitcoin futures contracts in December, but with the first contracts set to expire on 17 January, investors are expected to be hit with steep losses.
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