Bitcoin drops after dramatic gains ahead of futures
launch
Send a link to a friend
[December 09, 2017]
By Jemima Kelly and Gertrude Chavez-Dreyfuss
LONDON/NEW YORK (Reuters) - Bitcoin lost
almost a fifth of its value in 10 hours on Friday, having surged more
than 40 percent in the preceding 48 hours, sparking fears the market may
be heading for a price collapse.
In a hectic day on Thursday, bitcoin leapt from below $16,000 to $19,500
in less than an hour on the U.S.-based GDAX, one of the biggest
exchanges globally, while it was still changing hands at about $15,900
on the Luxembourg-based Bitstamp. Some market watchers attributed the
lurch higher to the coming launch of bitcoin futures on major exchanges.
Having then climbed to $16,666 on Bitstamp at around 0200 GMT on Friday,
it tumbled to $13,482 by around 1200 GMT - a slide of more than 19
percent. It was last down 8.2 percent at $15,232.32 on BitStamp.
![](http://archives.lincolndailynews.com/2017/Dec/09/images/ads/current/Alexander_sda_HFH_2017.png)
On Sunday, the Chicago-based Cboe Global Markets exchange is due to
launch a futures contract on the digital currency, to be followed by CME
Group the next week.
Craig Erlam, senior market analyst at OANDA in London, said investors
may have taken profits on bitcoin gains ahead of the Cboe launch, which
could open the door to short speculators who believe the price has risen
far too quickly.
"The initial bounce after this morning's sell-off suggests there's still
appetite for buying dips but that may not last if we don't see the kind
of rebound witnessed previously," said Erlam.
"Saying that, the way bitcoin is trading at the minute, I don't think
anyone would be surprised to see it end the day in the green," he added.
For an interactive graphic, click on http://tmsnrt.rs/2AHKJPd.
As investors braced for the Cboe launch, some big U.S. banks, including
JPMorgan Chase and Citigroup, will not immediately clear bitcoin trades
for clients once investors start trading futures contracts, the
Financial Times reported on Friday, citing people familiar with the
matter.
[to top of second column] |
![](../images/120917pics/busine71.jpg)
A bitcoin sign is seen during Riga Comm 2017, a business technology
and innovation fair in Riga, Latvia November 9, 2017. REUTERS/Ints
Kalnins/File Photo
![](http://archives.lincolndailynews.com/2017/Dec/09/images/ads/current/bennett_lda_123015.png)
JPMorgan and Citigroup did not immediately respond to requests for
comment.
On Thursday, Goldman Sachs Group Inc said it planned to clear bitcoin
futures for some clients as the new contracts go live on exchanges in
the coming days.
As bitcoin slumped, other cryptocurrencies climbed. Ethereum the
second-biggest, was up nearly 8 percent, according to trade website
Coinmarketcap.
For the week, bitcoin was still up almost a third. Since the start of
October, bitcoin has more than tripled in price. So far this year it has
soared about 15 fold, stoking concerns that the bubble would burst in
dramatic fashion.
Its rapid rise has drawn in millions of new investors. So far this week,
more than half a million new users have opened wallets with
retail-focused bitcoin wallet provider Blockchain, the firm said,
doubling the total number of users to 20 million since last year.
"Like a herd, market participants have a tendency to follow the money,"
said Fawad Razaqzada, market analyst, at Forex.com in London.
![](http://archives.lincolndailynews.com/2016/Aug/26/images/ads/current/ldn_medical_directory_small_2016.png)
"So when bitcoin goes up in value by hundreds, if not thousands, of
dollars per day, the fear of missing out (FOMO) kicks in and speculators
rush to buy the cryptocurrency because they don’t want to be left out."
(Reporting by Jemima Kelly in London and Gertrude Chavez-Dreyfuss in New
York; Additional reporting by Lisa Twaronite in Tokyo; Editing by Alden
Bentley and David Gregorio)
[© 2017 Thomson Reuters. All rights
reserved.] Copyright 2017 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |