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Bitcoin Crashes, Loses About $8,000 in One Week

December 22, 2017 at 15:37 by Yahia Barakah

The price of Bitcoin moved lower on Friday in a rapid crash that saw many investors unload their tokens of the virtual currency in fear of further losses over the weekend. The value of Bitcoin has dropped about $8,000 this week, which is more than 40% of the digital currency’s all-time high that was posted on Sunday.

The massive plunge today is the latest outcome of a selloff that persisted for the past three days. Traders’ growing concerns of an overvaluation bubble have fed the decline with an increasing momentum. Other digital assets were not isolated from the drop, as Bitcoin Cash, Ethereum, and Litecoin fell over the past 24 hours as well.

Bitcoin reached more than $19,600 last Sunday, a whooping gain from a little below $1,000 when 2017 started. However, the virtual currency is well known for its notorious volatility with a significant crash every quarter, and this week’s selloff is already shaping up to become the biggest in years.

Bitcoin’s losses were further broadened by negative remarks against the virtual currency this week. UBS Group AG named Bitcoin the biggest speculative bubble in history earlier this week. Bank of Japan Governor Haruhiko Kuroda added to the negative picture by stating that the digital asset is not functioning as a normal payment system would, and is instead being used for speculation.

Expectations of further upward momentum following the launch of Bitcoin futures from two major exchanges in the United States now appear to be wrong. The market may have already priced in the introduction of the new financial products, which removed much of the expected game changing effect.

It remains to be seen whether Bitcoin will be able to recover from this plunge. Interest from institutional investors in cryptocurrencies is gradually growing, with Goldman Sachs Group Inc. set to offer digital currency trading by June 2018, according to some reports. However, even with this week’s losses, Bitcoin is still up more than 1000% this year.

BTC/USD traded at 12,731.7 on the Bitstamp exchange as of 15:15 GMT on Friday, after dropping to 11,355.0 at 14:20 GMT, the lowest level since December 6. BTC/USD began trading today at 15,783.0.

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