Bitcoin Value Plunges After Christmas High
Bull run of the digital currency ends after sharp fall in value in Thursday trading
The digital currency Bitcoin has been struck down with a New Year hangover after its value fell more than 20 percent in just four hours of trading on Thursday.
This, according to Reuters, puts it on track for its worst daily performance in nearly two years, and comes after nearly the digital currency outperformed all its central-bank-issued counterparts in 2016 in terms of value rises.
It should be remembered that Bitcoin reached a two year record high in value over the Christmas period.
Down, Up, Down
Just prior to Christmas, Bitcoin had doubled in value in 2016, with one bitcoin costing a cool $875 (£714) on the Bitstamp exchange BTC=BTSP, its strongest level since January 2014.
In comparison, at the start of 2016, Bitcoin was trading around the $435 (£356) mark.
But the surge in value of Bitcoin did not stop at Christmas, and in the new year it reached a three-year high of $1,139.89 (£918.14) on 3 January.
This was a level not seen since its peak value of $1,163 (£949) in late 2013. Its rise had been helped by the fact that Bitcoin had not had a major failure in the last two years.
Indeed, the last time it was valued over $1,000 (£806), the leading Bitcoin exchange was Mt. Gox. But in early 2014, Mt. Gox revealed that it had suffered a massive cyber attack, in which it lost 750,000 Bitcoins valued at approximately $473 million (£381m) at the time.
This prompted a massive loss of faith and loss in value for the digital currency.
Yet in 2016, confidence was restored thanks to growing political uncertainty globally with the election of Donald Trump and the British Brexit vote to leave the European Union, coupled with a fall in value of the Chinese yuan.
But the good news didn’t last and on Thursday it dived from around $1,130 (£910) to a low of $885 (£712.78) as of 1325 GMT on Thursday.
The Bank of England has previously warned that Bitcoin could pose a threat to financial stability in the UK should it see widespread adoption.
