Bitcoin lost over a fifth of its value after hitting an all-time high of $11,395 on Wednesday, sliding $9,000 in volatile trade the next day.
On Thursday, the cryptocurrency plunged 8 percent on the Bitstamp exchange hitting $9,000, a $2,000 plunge in less than 24 hours. It then rallied to around $9,400, still down about 4 percent on the day.
“Naturally a few of the early bitcoin traders are taking some profits off the table,” said Charles Hayter, founder of a website that compares cryptocurrencies. He added, “Volatility is in the market at the moment and that means both positive and negative moves”.
Bitcoin has gained nearly 1,100 percent year-to-date on Wednesday and as of Thursday it is still up around 880 percent. The increase is driven by the indication the digital currency is gaining power in mainstream investment, as increased awareness.
The main market exchanges such as Nasdaq, CBOE Holdings and CME Group have stated they intend on providing future contracts based on bitcoin. Goldman Sachs chief executive Lloyd Blankfein has stated that he was he was open to bitcoin after media reported that the company was investigating a new trading operation for cryptocurrencies.
THE HERALD FINANCE REPORT
Start your workday the right way with the news that matters most.
New consumers of the cryptocurrency have exploded in the recent weeks, along with bitcoin’s own climb. London-based Blockchain.info, which is one of the largest global bitcoin wallet-providers, stated in an interview that had gained a record breaking number of new users, with more than 100,000 customers signing up equating to over 19 million users. Most consumers are purchasing the cryptocurrency not as a means of exchange, but as a means for profit.
Bitcoin’s price drop on Thursday also brought down the prices of other cryptocurrencies, such as Ethereum which bitcoin’s largest rival, which fell nearly twenty percent on the day. For the month, bitcoin still shows over a 40 percent price increase.