After reaching a peak of $13,880 on Wednesday as it got within tantalising touching distance of $14,000, it collapsed into $12,400 before slumping just below $12,000 on Thursday. The huge fall coincided with US exchange Coinbase going down shortly after rumours of a $100m transaction began to circulate on social media. Prior to the dramatic price tumble, some analysts had been quick to call the remarkable upward movement as the solid signal that a long bear market had become a bull market, with predictions of $20,000 over the coming weeks being made. However, the turning point came amid unconfirmed rumours that almost 9,000 BTC was about to be moved on Coinbase. Coincidentally, the San Francisco-based exchange went down, although it had previously notified users of some scheduled maintenance work.
The Twitter and Reddit rumour mills quickly connected the events and some degree of panic began to seep into the market.
Although being viewed as a welcome correction, this latest bout of outrageous volatility will do little to for the image of cryptocurrency in the eyes of the wider world.
Industry experts such as eToro’s Mati Greenspan, however, suggest investors have to make their peace with volatility as something that is built in to the digital asset’s DNA.
He told Express.co.uk: “For crypto enthusiasts, this latest rally comes as no surprise.
“In fact, it’s by design – Satoshi Nakamoto created bitcoin with an extremely limited supply, so each new wave of demand tends to have a massive impact on prices.”
It’s a view that was echoed by industry professional Jon Walsh who compared BTC to a rollercoaster ride.
He said: “Bitcoin’s price is driven by fear, greed and price manipulation in the market.
“There are very good reasons why bitcoin should appreciate in value, but the level of volatility we can see happening over the past 24 hours should come as no surprise to anyone who has had at least one eye on the market over the past few years.
“Bitcoin will continue to do this for years to come, and anyone getting involved should buckle up for the ride.”