Bitcoin Blues: Cryptocurrency market loses gains; BTC down below $8,300 again . (File Photo)
Bitcoin (BTC) has seen a dramatic drop in value over the past day, falling from a high of US$8824 per bitcoin on Tuesday to a low of US$8232 at press time, representing a 6.5% decrease. The value of the cryptocurrency was fluctuating around US$8700 until 3pm yesterday, before going into free fall.
Wednesday’s opening value was US$8474 before reaching a high of US$8492, and a falling to a low of US$8328 before the drop continued into the early hours of Wednesday.
Bitcoin hit its highest value before Christmas when the token reached the monumental price of just under US$20,000. However, the market value of the cryptocurrency plummeted rapidly by more than US$44 billion in January, falling by more than 10 per cent to below US$9000.
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Economists warned of a bitcoin bubble after the value of the cryptocurrency soared by over 900% last year. The digital currency has faced criticism by banks and financial experts, with Bill Gates telling CNBC he would bet against the cryptocurrency if he could.
Gates said: “As an asset class, you're not producing anything and so you shouldn't expect it to go up…It's kind of a pure 'greater fool theory' type of investment…I agree I would short it if there was an easy way to do it.”
Bank of England Governor Mark Carney has also been highly critical of the cryptocurrency landscape. However, he softened fears prior to the G20 summit in Hamburg last year, stating that cryptocurrencies do not pose a risk to the financial stability of traditional currencies.
Yet despite Bitcoin’s recent plummeting value, BitMex CEO Arthur Hayes stated he was not worried. The former Citigroup trader said his price prediction for bitcoin was “$50,000 by the end of the year”.
When asked if he was a ‘little wobbly about that position’ when bitcoin price plunged in January, Hayes responded: “No. It’s my job to make predictions – whether or not they are right or wrong – it doesn’t really matter to me.”
He added: “I’m a volatility trader at the end of the day. We make our money if it is volatile…If it goes up, if it goes down, if you have Bill Gates calling it a fraud or whatever it is – great. Short it. I don’t care…Or if you think it is going to be a million dollars in a few months, great, buy it. We just match trades.”
And, it’s the final day of the Consensus Conference in New York City – the world’s largest blockchain and cryptocurrency technology summit. We’ll have a wrap-up of today’s news and events from the summit, plus expert and industry professional takeaways. Stay tuned.