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Bitcoin Recovers to $15,000 Following Last Week Crash

December 26, 2017 at 13:29 by Yahia Barakah

The price of Bitcoin rose to more than $15,000 on Tuesday, following a brutal crash last week that erased about 40% of the virtual currency’s all-time high. The digital currency is still about $4,600 below its highest level in history, which it reached on December 17.

Bitcoin had partly recovered from last week’s losses to a little more than $15,700 on Saturday, before going through a milder decline over the past two days. The digital currency is now set to end the current year with more than fifteen-fold gains after starting the year below $1,000.

However, the recent display of Bitcoin’s volatility left investors very wary of the digital asset, which added to the effect of thin trading due to the holiday season. Many analysts are now concerned that speculative trading is taking over the virtual currency’s market, which is feeding an overvaluation bubble that produces huge price declines.

Bitcoin’s volatility might result in more than a few worried investors, as the rapid ups and downs appear to be chasing away merchants and retailers who accept the digital currency as a method of payment. In a recent note, Morgan Stanley analyst James Faucette highlighted the fact that if no one is willing to accept Bitcoin, then its real value might be as little as zero.

Faucette’s remark followed comments last week from Japanese officials that pointed to Bitcoin’s failure in becoming a reliable payment system due to volatility and high level of speculations. The shrinking number of retailers that accept Bitcoin may add further hurdles to the virtual currency’s ability to gain institutional approval in the near future.

Another negative outcome of Bitcoin’s volatility could be a shift in the position of central banks around the world. After being regulated and legalized within a number of economies earlier this year, Bitcoin is now facing a backlash as policymakers became more uncertain of the digital asset.

Israel Securities Authority Chairman Shmuel Hauser said earlier this week that the authority will consider a new regulation that bans companies based on Bitcoin and other cryptocurrencies from trading. Last week, Singapore’s central bank issued a warning against investing in virtual currencies amid increased risk of sharp losses due to speculative behaviors.

BTC/USD traded at 15,372.5 on the Bitstamp exchange as of 13:05 GMT on Tuesday after touching 15,580.0 at 06:50 GMT, the pair’s highest level since December 24. BTC/USD began the day at 13,998.7.

If you have any questions and comments on Bitcoin today, use the form below to reply.

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