TOKYO: Bitcoin fell more than 10 percent on Wednesday to a one-week low of $15,800 at cryptocurrency exchange Bitstamp, losing almost one- fifth of its value from a peak hit just three days ago.
The digital currency has been sliding since it reached a record high of $19,666 on Sunday, when the exchange giant CME Group launched bitcoin futures, one week after its rival Cboe Global Markets listed the world’s first bitcoin futures.
The bitcoin’s monumental gains this year – its price has soared about 19 times – have spurred caution and alarm among some policymakers.
Singapore’s central bank on Tuesday issued a warning against investment in cryptocurrencies, saying it considers the recent surge in their prices to be driven by speculation and that the risk of a sharp fall in prices is high.
South Korea’s Financial Supervisory Service said on Tuesday it does not consider bitcoin and other cryptocurrencies to be currencies of any kind.
Japanese Finance Minister Taro Aso said on Tuesday that bitcoin had not been proven as a credible currency.
Bitcoin has since pared some of the losses and last traded at $16,939, down 4.3 percent for the day.
Its decline since Sunday is hardly a major correction for digital currency. In November, it tumbled almost 30 percent in four days from $7,888 to $5,555. In September, it fell 40 percent from $4,979 to $2,972.
Many financial professionals have said bitcoin, which now has market capitalization of about $275 billion, slightly bigger than Visa Inc is a typical bubble, given how small the actual number of transactions are.
The market is highly inefficient, with bitcoin futures trading much above cash bitcoins while the gaps of price quotes between various exchanges are also very large, they say.
