Bitcoin falls by more than $3,000, dropping through $13,000 mark

Bitcoin fell through the psychologically key level of $13,000 before regaining some lost ground.
Cryptocurrencies have traded in a volatile fashion for several days.
Ripple is the only major cryptocurrency that's moving higher.

Broken representations of the Bitcoin virtual currency, placed on a monitor that displays binary digits, are seen in this illustration picture, December 8, 2017.
Dado Ruvic | Illustration | Reuters
Bitcoin and several other major cryptocurrencies plunged Thursday evening New York time as the end of an exponential year of growth neared.

The slashing decline triggered temporary, built-in trading halts in the bitcoin futures traded on the CME and Cboe.

Bitcoin plunged more than 20 percent to a low of $12,504 according to CoinDesk, down more than $3,000 from $15,820 less than 12 hours ago. The digital currency recovered slightly to $13,545, as of 4:09 a.m., ET, but was still down almost 13 percent for the session.

Bitcoin 12-hour performance

Source: CoinDesk

CoinDesk's bitcoin price index tracks the price of bitcoin on Bitstamp, Coinbase, itBit and Bitfinex.

Despite the sharp drop, the decline took bitcoin only to roughly two-week lows. The digital currency is still up more than 1,300 percent this year.

It was not immediately clear what caused the digital currency's sudden dive.

"The vast majority of long term holders of bitcoin are still way in the money and have shown no sign of cashing out," Michael Jackson, partner at venture capital firm Mangrove Capital Partners, said in an emailed comment Friday.

"We see the exit of short term speculators and we have seen it before. The fundamentals are still in place and there is no reason why the bitcoin ecosystem should not continue to develop."

A very volatile week
However, the declines followed a volatile few days for cryptocurrencies. The bitcoin offshoot, bitcoin cash, soared to record highs above $4,000 Wednesday, as crypto-marketplace Coinbase made a rocky attempt to make it possible for people to buy and sell the digital currency.

However, bitcoin and bitcoin cash fell Thursday, and losses accelerated in the evening.

Bitcoin cash dropped almost 32 percent to $2,462 as of 4:09 a.m., ET, according to CoinMarketCap. Another digital currency, ethereum, fell 24.3 percent to $655, while litecoin fell 27 percent to $241, the website showed.

The digital currencies are among the five largest by market capitalization on CoinMarketCap and have soared dramatically this year to record highs.

Even with Thursday's declines, bitcoin cash is up more than 600 percent since it split from the original bitcoin on Aug. 1. Ethereum is up more than 9,000 percent this year, and litecoin is up more than 6,500 percent, according to CoinMarketCap.

Each of those digital currencies aims to improve on some aspect of bitcoin, such as transaction speed or ease of integration with applications.

Ripple rising
Ripple, or XRP, was the only major cryptocurrency trading higher on Friday.

Ripple topped the psychologically key $1 level earlier Thursday, and its gains accelerated throughout the session to a record high of $1.38, according to CoinMarketCap. As of 4:09 a.m. ET, ripple was trading at $1.10 with a market value of $42 billion, the third-largest just behind bitcoin and ethereum, according to CoinMarketCap.

Ripple is up a staggering 19,500 percent this year, the website's data showed.

Ripple is officially the name of a startup using blockchain technology to develop a payments network for banks, digital asset exchanges and other financial institutions. XRP is the digital coin that network participants use for transactions.

Cryptocurrencies such as bitcoin are notoriously volatile. But so far, they have also proven quite resilient. Bitcoin has bounced back from several declines of more than 20 percent this year to reach new record highs.

Article by: Evelyn Cheng (https://www.cnbc.com/2017/12/21/bitcoin-price-cryptocurrency-falls-by-more-than-2000-in-12-hours.html)