After suffering from a steep sell-off in trading late last week, cryptocurrency bitcoin was able to recoup some of its losses, trading above $16,100 on Tuesday (Dec. 26).
According to news from CNBC, in morning trading, bitcoin jumped more than 12.5 percent to more than $16,100; in afternoon action it was trading around $15,700. CNBC cited Coinbase for its trading data on bitcoin. Interest in bitcoin was so high on Tuesday that Coinbase said that due to high volume, it was experiencing a backlog of outgoing transactions for both bitcoin and Ethereum and that the outgoing transactions could be delayed for several hours.
As of Tuesday, bitcoin recovered more than 50 percent of its losses since hitting a low of $10,400 late last week. Friday (Dec. 22) was a particularly volatile day of trading for the cryptocurrency, with no reason for the wild swings. Bitcoin plunged briefly below $11,000 on Friday, down 47 percent from a record high at the start of the week.
CNBC reported that while bitcoin hit a record high above $19,800 on Sunday, and was trading near $15,500 for much of Thursday, an afternoon sell-off accelerated into the night. That resulted in bitcoin dropping 30.2 percent Friday morning to a low of $10,400 on Coinbase. It recovered above $14,600 by Friday afternoon, off 27 percent from the all-time high.
“I would say the drop in bitcoin is a result of the massive new in-flows of retail investors who are relatively ‘weak hands’ and more prone to sell at the sight of falling prices than the capital that has been in the system for a while that has a longer-term outlook,” Alex Sunnarborg, founding partner at cryptofund Tetras Capital, said in an email.
Bitcoin futures also dropped on Friday. The CME bitcoin futures that launched Saturday, which will be expiring in January, reached “limit down,” tumbling almost 20 percent to $12,265 in morning trading before settling at $14,135, which is 7.8 percent lower. And the Cboe bitcoin futures contract, which launched Dec. 10, briefly dropped 21 percent to $12,050.
Overstock CEO Patrick Byrne, who plans on switching the company’s focus from eCommerce to cryptocurrency, offered his thoughts on the dip in an interview with TheStreet: “Well, I don’t know if it’s a flash crash, a trading issue or the new ability of Wall Street to short,” he said.