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Bitcoin sinks abruptly after seven weeks of recovery

CryptocurrencyMay 17, 2019 05:37AM ET
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© Reuters. FILE PHOTO: A collection of Bitcoin (virtual currency) tokens are displayed in this picture illustration

TOKYO (Reuters) - The price of bitcoin abruptly sank more than 20% on Friday, a move that didn't appear to have a particular trigger and came after a strong recovery in the crypto-currency since early April that took it to 10-month highs.

Bitcoin fell to as low as $6,178 at Bitstamp exchange, down 21.6% from the previous close and last stood down 8.2% at $7,236.

"The sudden fall does not appear to have been driven by any particular news item," said Ryan Rabaglia, head of trading at digital asset brokerage OSL.

"Rather it looks to be driven by large sell orders by a handful of people or even just one person, who are likely realizing profits after the recent price rise or looking to acquire more at lower prices," Rabaglia said.

After many lackluster months, the price of bitcoin started to rally from early April, hitting a 10-month high earlier this week.

While there is no clear consensus on what drove the rally, some analyst have noted rising tensions between Washington and Beijing may have helped to boost demand for bitcoin and other digital currencies that are not backed by a government.

Bitcoin sinks abruptly after seven weeks of recovery
 

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Comments (6)
Mickey Mau
Mickey Mau May 17, 2019 8:49AM ET
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I think that Bitcoin (and all others cryptos as well) is an extremely volatile instrument ( note. (cont.)
Mickey Mau
Mickey Mau May 17, 2019 8:45AM ET
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that I choose to call it "instrument" rather than "asset") and it's precisely that volatility which, by definition, has caused, currently causes and will, indeed, continue to cause huge movements in any direction. These price swings have happened ( many times ) in a very short period of time, namely hours (or even minutes!). And no breaking news or special trigger is necessary for it to occur. Why not? It's simple.....Bitcoin is a tool that was created for speculative purposes above anything else. It's not backed by any government or financial institution so if things turn sour they'll effectively be worthless and there's no one who can reimburse you for your investment, no one responsible to be blamed for its demise and no insurance policy to mitigate the losses. I have no idea in what world live those people who believe it's actually a true currency. (cont.)
Mickey Mau
Mickey Mau May 17, 2019 8:41AM ET
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(cont.). It's not backed by any government or financial institution so if things turn sour they'll effectively be worthless and there's no one who can reimburse you for your investment, no one responsible to be blamed for its demise and no insurance policy to mitigate the losses. I have no idea in what world live those people who believe it's actually a true currency. Try buying everyday items like a cup of coffee, a soda or a bus ticket with Bitcoin...In the largest cities you may find a spot or too provided you're willing to drive an extra five or ten miles to find someone who'll take crypto-currencies. But in the outback someone may think you're a conman and shoot you on the spot!. (cont.)
Mickey Mau
Mickey Mau May 17, 2019 8:40AM ET
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It's not backed by any government or financial institution so if things turn sour they'll effectively be worthless and there's no one who can reimburse you for your investment, no one responsible to be blamed for its demise and no insurance policy to mitigate the losses. I have no idea in what world live those people who believe it's actually a true currency. Try buying everyday items like a cup of coffee, a soda or a bus ticket with Bitcoin...In the largest cities you may find a spot or too provided you're willing to drive an extra five or ten miles to find someone who'll take crypto-currencies. But in the outback someone may think you're a conman and shoot you on the spot! . (cont.)  . (cont.)
Mickey Mau
Mickey Mau May 17, 2019 8:38AM ET
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(cont.) The last food item for thought is the following. A year ago I wondered who could Bitcoin substitute all fiat money given that it's a limited amount of money by design and around 80% of it has already been issued. It could never be enough to pay for all trade. Now it's crystal clear that problem has been solved. Today, as of Friday May 17th, 2019 there are 1,658 trading cryptos in the market. Thousands more can be created (many are already in the process) and probably will. Now, let me ask you something....if you owned a coffee shop how many and which cryptos would you choose to accept as payment? I'm assuming operating in, perhaps, 3,000 or more different currencies could be a problem for mom and pop stores. And, what the ***..it'd be a problem for Walmart too!  And, as a customer, how many different currencies must you own to be able to pay everywhere?
Stephen Fa
Stephen Fa May 17, 2019 7:57AM ET
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I'm buying the dip when into $6000s
 
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