Bitcoin's blistering rally ends, value tumbles 20% in one day

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Bitcoin slid to as low as 9,000 US dollars in volatile trade on Thursday, having lost more than a fifth of its value since hitting an all-time high of 11,395 US dollars on Wednesday.

The cryptocurrency fell as much as 8 percent on Thursday on the Luxembourg-based Bitstamp exchange to hit 9,000 US dollars marking a fall of well over 2,000 US dollars in under 24 hours.

One market-watcher attributed the fall to outages in bitcoin exchanges and the heavy price surge of recent times.

“Naturally a few of the early bitcoin traders are taking some profits off the table,” said Charles Hayter, founder of CryptoCompare.com.

“Volatility is in the market at the moment and that means both positive and negative moves.”

The latest fall has tempered an astronomical rise for the cryptocurrency in recent months – bitcoin was up almost 1,100 percent year-to-date on Wednesday. As of 1500 GMT on Thursday, it was still up around 880 percent.

The rise has been fueled by signs that the digital currency is slowly gaining traction in the mainstream investment world, as well as by increasing awareness.

Several large market exchanges including Nasdaq, CBOE Holdings and CME Group – the world’s largest derivatives exchange – have said they are planning to provide futures contracts based on bitcoin.

Bitcoin’s rapid ascent has prompted warnings from a stream of prominent investors that it had reached bubble territory, while the Bank of England deputy governor on Wednesday said investors should “do their homework” before investing in the digital currency.

Source(s): Reuters