TRADERS are warning that Bitcoin could crash this week amid a schism over how the hugely volatile cryptocurrency should operate.
Computer whizzes behind the virtual currency are split over how to handle Bitcoin transactions with a new software update set to launch on Friday.
Jordan Hiscott, chief trader at Ayondo Markets, which launched Bitcoin trading last month, said that its “astounding” rise reminds him of the technology bubble in 1999, with investors seeking large short-term gains.
“Bitcoin could be in an asset bubble that may reach a crescendo within days.”
Right now the outcome is unclear, Hiscott said: “This uncertainty and short-term speculation could lead to a deflating of the asset bubble.”
Bitcoin exists only on computers with no regulatory authority behind it, but has a market capitalisation of more than $38billion (£29billion).
Bitcoin could be in an asset bubble that may reach a crescendo within days
Jordan Hiscott
Originally launched in 2009, it was the world’s best-performing currency in 2015 and 2016 and has netted millions for investors who got in early.
Bitcoin surged another 150 per cent this year to top $3,000 in June, but has since fallen back more than 20 per cent to around $2,327. Other virtual currencies, including Ethereum, have also fallen.
Josh Mahoney, market analyst at trading platform IG, said Bitcoin is a new phenomenon and that makes it very difficult to price: “A lot of speculative money has gone into it, which always makes for a volatile market.”
He said that Bitcoin has suffered sharp sell-offs before, notably after hackers stole coins from online exchanges, but has always fought back: “Every sell-off has been greeted by a new wave of buyers.”
The price has been driven by Chinese investors who are using Bitcoin to shift money out of the country.
“This means it also remains vulnerable to tighter Chinese regulation. ¬Risk-averse investors would not touch it with a barge pole,” Mahoney added.
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This might have to do something with that Bitcoin-cash fork, or the (((Rothschild))) buying a good amount of BTC.
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This news is nearly a month out of date.