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Bitcoin surged Thursday, recovering from a sharp sell-off to briefly top $12,000. The volatile digital currency hit a high of $12,045.09, up 30,9 percent from a low of $9,199.59 a day ago on CoinDesk. CoinDesk’s bitcoin price index tracks prices from Bitstamp, Coinbase, itBit and Bitfinex. Bitcoin traded about 27 percent above that low at $11,736 midday Thursday.
“Large dips of 25 percent or greater are a feature of the global, super liquid, near-instant cryptocurrency trading environment,” Nolan Bauerle, director of research at CoinDesk, said in an email.
“There have been six such large sell-offs since the summer of 2016,” Bauerle said. “The pattern is familiar: Bitcoin falls, finds a bottom and consolidates at previous all-time high. Traders who seek to increase their total bitcoin holdings take a fiat position, or move to another cryptocurrency, then buy back into bitcoin. This massive, global traffic pushes prices back up.”
U.S. dollar-bitcoin trading accounted for about 40 percent of trading volume, while the Japanese yen accounted for about 29 percent, according to CryptoCompare. Trading in South Korean won accounted for about 4.6 percent, the website said.
Bitcoin plunged more than 30 percent between Monday and Wednesday to below $10,000. The sell-off, which spread across major cryptocurrencies, followed reports that raised concerns about increased regulation on cryptocurrencies from South Korean and Chinese authorities. Other digital currencies, such as ripple, also attempted to recover much of their losses Thursday.
On Thursday, Fundstrat Global Advisors’ head of research, Tom Lee, said his firm would be “aggressive buyers” of bitcoin at $9,000. He also predicted the digital currency will reach $25,000 by the end of this year, and $125,000 by 2022.
As of midday Thursday, Bitcoin remained about 15 percent lower for the year, and more than 40 percent off its record high hit in December. — CNBC
Bongani Ndlovu