Bitcoin falls 30 percent, posts worst week since 2013

NEW YORK/LONDON-Reuters

Bitcoin plunged by 30 percent to below $12,000 on Dec. 22 as investors dumped the cryptocurrency after its sharp rise to a peak close to $20,000 prompted warnings by experts of a bubble.

After falling to as low as $11,159, it recouped some losses to trade above $14,000 on the Bitstamp platform, down 9 percent on the day. It is down around 25 percent this week, its largest weekly loss since April 2013.

It capped a brutal week that had been touted as a new era of mainstream trading for the digital currency when bitcoin futures debuted on CME Group Inc, the world’s largest derivatives market on Dec. 18.

The Dec. 22 fall bled into the U.S. stock market, where shares of companies that have lashed their fortunes to bitcoin or blockchain - its underlying technology - took a knock. Long Blockchain Corp, Overstock.com Inc, Riot Blockchain Inc and Marathon Patent Group Inc lost between 2 percent and 15 percent.

The biggest and best-known cryptocurrency has risen around twentyfold since the start of the year, climbing from less than $1,000 to as high as $19,666 on the Luxembourg-based Bitstamp exchange earlier the week and to over $20,000 on other exchanges. But it has fallen each day since.

In the futures market, bitcoin one-month futures on Cboe Global Markets were earlier halted due to the steep price drop, while those trading on the CME hit the limit down threshold.

“The crypto markets have experienced several flash crashes over the past few years but we do believe there has been some overvaluation in the market, particularly over recent months,” said Jamie Burke, chief executive officer at venture capital firm Outlier Ventures.
,“It’s much more likely this is a natural correction following over-exuberant market sentiment.”