Bitcoin Finds Floor After Worst Selloff Since 2015

Bitcoin rebounded on Saturday along with most of the major cryptocurrencies, halting a four-day tumble that drew worldwide attention to the unregulated $500 billion market that’s frequently called a bubble.

The double-digit bounceback was strongest with second-tier digital coins. Bitcoin cash soared 21 percent and litecoin gained 12 percent as cryptocurrency traders regained optimism. They weren’t put off by comments published Saturday from a central banker in Germany that “the risk of rapid losses” is obscured in cryptocurrencies.

“The enthusiasm hasn’t been destroyed,” Marc Ostwald, global strategist at London-based ADM Investor Services International, said by phone from Warsaw. “It’s a volatile market, and investors are hungry for that. They say everything else is boring.”

The broad recovery on Saturday coincided with a pause in bearish news that had snowballed since Monday and shaved 24 percent off bitcoin’s value, its biggest four-day selloff since 2015. Comments by central bankers, a decision by litecoin’s founder to sell all his holdings and investors’ wishes to cut stakes before the holiday season fueled the plunge.

“With holidays approaching, some people want to step away from the table, and take their chips with them,” Ostwald said about the selloff. “Still, I wouldn’t want to put it down too much to rationality, because this is not a rational market.”

While bitcoin wasn’t the most volatile crypocurrency in the past week, it’s the largest, and it shook the world of digital-coin trading on Friday when its interday plunge reached 30 percent. That was the steepest dive since Jan. 14, 2015, back when its market value was just $2.4 billion. On Saturday it was about $260 billion.

Bitcoin advanced 10 percent to $15,530 at 4:21 p.m. New York time on Saturday, compared with 24 hours earlier, according to data on coinmarketcap.com.

In a late-week comment that undercut confidence, Michael Novogratz, the former Goldman Sachs Group Inc. and Fortress Investment Group LLC macro trader, said he’s shelving plans to start a cryptocurrency hedge fund. He predicted that bitcoin may extend its plunge to $8,000. Earlier this month he predicted it could reach $40,000 within a few months.

For a look at whether Goldman is building a cryptocurrency trading desk, click here.

Growing pains in the digital-coin world and warnings emerged all week, adding to volatility.

Coinbase, one of the larger trading platforms, on Friday said all buys and sells were temporarily unavailable before they were re-enabled, according to its website. There were no incidents reported Saturday.

In South Korea, Yapian, the owner of bitcoin exchange Youbit, said Tuesday it would close and enter bankruptcy proceedings after a cyberattack that claimed 17 percent of its total assets.

‘Bitter Losers’

There’s been a string of warnings by regulators for investors in digital coins.

“We are seeing a rapid rise in value, which hides the risk of rapid losses,” Bundesbank board member Carl-Ludwig Thiele said in a Euro am Sonntag report. He said there is a wide debate going on about the use of digital central-bank money in a closed system, but that he doesn’t currently expect it’s introduction.

Felix Hufeld, president of German banking supervisor BaFin, advised consumers that trading in bitcoin would produce “bitter losers” and could result in a “total loss,” in an interview with German newspaper Bild.

EU Warning

That echoed comments three days ago by the European Union’s financial-services chief, Commissioner Valdis Dombrovskis, who asked the heads of the EU’s three financial supervisors to update their warnings to consumers “as a matter of urgency” in light of recent market developments, according to a letter seen by Bloomberg.

In past years, central banks and the commercial lenders they oversee have made strides to curb money-laundering through greater transparency rules, only to see anonymous transactions explode in the nascent cryptocurrency industry — under names like Verge and Zcash. Their admonishments this month haven’t stopped double-digit rebounds.

“Huge rises and sudden, spectacular setbacks wouldn’t surprise me going forward,” ADM’s Ostwald said. “The worry is going to be, at some point, the pips are going to start squeaking. Retail investors losing money will ask, ‘Why aren’t you intervening to help me? And the answer is going to be, ‘Well, this is a casino. On your head, be it.’ ”

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    Read more: https://www.bloomberg.com/news/articles/2017-12-23/bitcoin-climbs-finding-floor-after-worst-selloff-since-2015

    Bitcoin Lost Almost 20% of Its Value This Week

    Bitcoin faced one of its biggest tests this week, losing almost 20 percent of its value after the world’s largest cryptocurrency reached a record high Monday.

    The digital currency plunged as much as 30 percent on Friday, before paring losses, as this week’s selloff extended to a fourth day. The weekly decline is the biggest in almost three years. Other cryptocurrencies also tumbled: ethereum dropped as much as 36 percent and litecoin slumped as much as 43 percent, according to composite prices on Bloomberg.

    Michael Novogratz, the former Goldman Sachs Group Inc. and Fortress Investment Group LLC macro trader, said he’s shelving plans to start a cryptocurrency hedge fund and predicted that bitcoin may extend its plunge to $8,000.

    “We didn’t like market conditions and we wanted to re-evaluate what we’re doing," Novogratz said in a phone interview. He predicted last week that bitcoin could reach $40,000 within a few months.

    Bitcoin dropped to as low as $10,776, before recovering to $14,303 at 4:04 p.m. in New York. It last traded below $10,000 on Dec. 1, when the U.S. Commodity Futures Trading Commission agreed to allow trading in bitcoin futures. The price of the digital coin had more than doubled in the prior three weeks.

    The losses represent a major test for the cryptocurrency industry and the blockchain technology that underpins it, which have rapidly entered the mainstream in recent weeks. Bears cast doubt on the value of the virtual assets, with UBS Group AG this week calling bitcoin the “biggest speculative bubble in history.” Bulls argue the technology is a game changer for the world of investment and finance. Both will be closely watching the outcome of the current selloff.

    “The sharks are beginning to circle here, and the futures markets may give them a venue to strike,” said Ross Norman, chief executive officer of London-based bullion dealer Sharps Pixley Ltd., which offers gold in exchange for bitcoin. “Bitcoin’s been heavily driven by retail investors, but there’ll be some aggressive funds looking for the right opportunity to hammer this thing lower.”

    Traders who bought the currency on futures exchanges using collateral may start facing margin calls following the price decline. Two venues launched products in recent weeks that required hefty security, with Cboe needing 44 percent to clear contracts, and the CME 47 percent. Brokers set safety nets even higher.

    Coinbase, one of the world’s largest cryptocurrency exchanges, said all buying and selling was temporarily disabled during today’s rout, after having delays in processing wire transfers and verifying new customers for the past week due to higher traffic. Bitcoin transaction volume jumped more than 30 percent on Coinbase’s GDAX exchange, while fees to approve and record the transactions on the blockchain surged to a record $55, according to Bit Info Charts.

    Many of the recent news stories and market moves connected to cryptocurrencies appear to carry hallmarks of the mania phase of a bubble. Long Island Iced Tea Corp. shares rose as much as 289 percent on Thursday after the unprofitable Hicksville, New York-based company rebranded itself Long Blockchain Corp. Bank of Japan Governor Haruhiko Kuroda said on Thursday bitcoin isn’t functioning like a normal means of payment and is being used for speculation.

    Still, cryptocurrencies are attracting established players. Goldman Sachs Group Inc. is setting up a trading desk to make markets in digital currencies such as bitcoin, according to people with knowledge of the strategy. The bank aims to get the business running by the end of June, if not earlier, two of the people said.

    For related news and information:
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      Read more: http://www.bloomberg.com/news/articles/2017-12-22/bitcoin-plummets-toward-13-000-down-more-than-30-from-record

      Bitcoin Soars Past $8,000

      Bitcoin &#x 2019; s unpredictable and ruthless rally reveals no indication of easing off, with the world &#x 2019; s biggest cryptocurrency defying growing bubble worries to strike yet another turning point.

      Bitcoin increased as much as 7.7 percent to a record $8,290 since 2:47 p.m. in New York. It &#x 2019; s been a troubled year for the virtual currency, with 3 different depressions of more than 25 percent all paving the way to subsequent rallies.

      Even the most bullish experts can &#x 2019; t stay up to date with bitcoin &#x 2019; s rally. Perspective Research &#x 2019; s Ronnie Moas, who states bitcoin &#x 2019; s market cap will one day reach gold at $8 trillion, is raising his 2018 cost target for the digital currency to $14,000 from $11,000. He had increased it from $7,500 last month.

      &#x 201C; The inflation in this thing is huge, &#x 201D; Luke Hickmore, a senior financial investment supervisor at Aberdeen Standard Investments in London, stated in an interview with Bloomberg TELEVISION. &#x 201C; When will it collapse? Who understands. It will trigger a great deal of discomfort. &#x 201D;

      Even as lots of doubters call the property a bubble waiting to pop, it &#x 2019; s ending up being too huge for numerous on Wall Street to overlook. CME Group Inc., the world &#x 2019; s greatest exchange, will begin providing futures trading on bitcoin next month, while senior executives at Goldman Sachs Group Inc. and Citigroup Inc. have actually stated they are looking into cryptocurrencies and the blockchain innovation that underlies them.

      Terminal users can learn more on bitcoin and bitcoin money with our Q&A.

      Recent volatility has actually originated from a pickup in individuals changing to alternative virtual currencies, significantly bitcoin money. That &#x 2019; s acquiring appeal due to lower deal expenses and faster speed. New cryptocurrency&#xA 0; versions are emerging as disputes over bitcoin &#x 2019; s style continue and chances for making a fast dollar show tough to miss .

      Bitcoin money dropped 0.6 percent on Monday to trade at $1,189, below a high of $1, 388 on Nov. 12,&#xA 0; Coinmarketcap.com costs reveal. Bitcoin has actually advanced more than 700 percent this year and now boasts a market price of more than $130 billion.

      &#x 201C; I discover it rather frightening and exceptional how, no matter just how much bitcoin is pounded by sellers, it merely gets better even more powerful, &#x 201D;&#xA 0; stated Lukman Otunuga, an expert at currency brokerage ForexTime Ltd. &#x 201C; Will bitcoin strike $10,000 prior to year end? This is the concern every financier is asking. &#x 201D;

        Read more: http://www.bloomberg.com/news/articles/2017-11-19/bitcoin-soars-past-8-000-as-technology-shift-concern-vanishes