The corrective course of bitcoin price sees the cryptocurrency hit a low of $,1850 on Bitstamp. The figure is a 7-day low in a week that saw bitcoin reach an all-time high beyond $2,750. The sharp drop follows fears of a bubble among observers this week.
The narrative for much of the week was ‘another day, another all-time high for the world’s most prominent cryptocurrency’.
Speaking to Reuters, Leonhard Weese, president of the Bitcoin Association Hong Kong, summed up the bitcoin rush:
Suddenly everyone is realising that there will only ever be 21 million bitcoins and that this might be there last chance to get into the market – and that is what is leading to these huge price spikes.
On Thursday’s trading, bitcoin price spiked nearly 15%, gaining over $350 in value as it reached a new all-time high of $2,760 on the Bitstamp Price Index (BPI). A sharp fall later, bitcoin was trading around $2,400.
Led by trading in US markets, bitcoin’s value in recent days is being propelled by mainstream coverage that’s driving everyday investors to jump aboard in adopting the cryptocurrency. Figures from CoinmarketCap reveal a mammoth $2.5 billion in bitcoins traded over a 24-hour period, as the cryptocurrency approached a $45 million market cap.
The US trading market totaled over 35% of the global trading on average throughout the week. The overwhelming demand saw Coinbase, one of the largest US bitcoin trading platforms, suffer multiple outages this week. “Coinbase has experienced unprecedented traffic and trading volume this week,” stated the exchange, which also facilitates Ethereum and Litecoin trading.
A spiking demand for the cryptocurrency is bolstering Asian trading markets. China, previously the world’s largest bitcoin trading market, is making a return to the top end of the table with chatter of the country’s bitcoin exchanges resuming withdrawals in June.
Over the last 24 hours, Japan is pulling even with Chinese markets. The increased trading in Japan coincides with a drop in the $300 premiums this week. The Japanese government recognized bitcoin as legal tender in April, triggering a boom in mainstream demand. To fuel supply, a number of Japanese companies from other industries are vying for a place in the bitcoin economy, with plans to launch over 10 new exchanges in the country.
Speaking to Reuters, an analyst looking into Japanese markets stated:
In the past, bitcoin was traded only by the people who have been dealing with crypto-currencies. This year, regular people are starting to join, making trading so volatile.
As bitcoin captures the attention of the world, never has the volatility been more pronounced. Enough to see one Indian bitcoin exchange, Zebpay, tell its users to be wary of getting into investing in bitcoin, the very service it offers.
“Bitcoin prices are very volatile right now. Please use caution while investing,” the exchange wrote. “This is a new technology innovation on a global but early stage. Your investment should match your knowledge. Be safe!”
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