Bitcoin loses third of value over week

December 22, 2017 at 10:56

Bitcoin continues to give its investors an exciting ride. This week it has lost more than a third of its value from its record high of nearly $20,000.

On Friday, it fell below $11,000, according to the Coindesk exchange website,before recovering to about $12,000.

This puts it on track for its worst week since 2013.

The currency has had a blistering trip over the past 12 months. Its price at the start of the year was $1,000.

Charles Hayter, founder and chief executive of industry website Cryptocompare, said: "A manic upward swing led by the herd will be followed by a downturn as the emotional sentiment changes."

He said a lot of traders would have been cashing in on the spectacular gains made over the year.

The past few weeks have seen it gain some legitimacy after two major exchanges in the US started trading futures contracts underpinned by Bitcoin.

This allows investors to bet on where they expect the price of Bitcoin to be at certain points in the future.

Trading on Friday was so rocky both exchanges, the CME and the CBOE, stopped trading temporarily.

Many global exchanges have automatic brakes that apply once a commodity or asset has moved by a certain amount.

Regulators around the world have stepped up their warnings about its provenance as an investment.

Its origins are only barely understood, its volatility is extreme and its use as a currency is limited.

One of this week's most striking comments comes from Denmark's central bank governor, who called it a "deadly" gamble.

Earlier this month, the head of one of the UK's leading financial regulators warned people to be ready to "lose all their money" if they invested in Bitcoin.

Andrew Bailey, head of the Financial Conduct Authority, told the BBC that neither central banks nor the government stood behind the "currency" and therefore it was not a secure investment.