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Bitcoin volatility sees trades suspended on certain exchanges | |
(about 2 hours later) | |
Bitcoin plunged on Friday, extending a fall that saw the crypto-currency lose more than a third of its value from a record of nearly $20,000 (£15,000). | |
The crypto-currency's price dipped below $11,000 on Friday, according to the Coindesk exchange website, before recovering to about $12,000. | |
Amid the swing, three Bitcoin-related exchanges suspended certain trades. | |
Bitcoin has had a blistering trip over the past 12 months. Its price at the start of the year was $1,000. | Bitcoin has had a blistering trip over the past 12 months. Its price at the start of the year was $1,000. |
It is now on track for its worst week since 2013. | |
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." | 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. | He said a lot of traders would have been cashing in on the spectacular gains made over the year. |
What's going on? | |
The past few weeks have seen Bitcoin enter the mainstream after the CME and CBOE 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. | This allows investors to bet on where they expect the price of Bitcoin to be at certain points in the future. |
The exchanges have automatic brakes that apply once a commodity or asset has moved by a certain amount. | |
That happened on both the CME and CBOE exchanges, precipitating brief halts in trading. | |
One of Bitcoin's major exchanges, Coinbase, also suspended buying and selling of the crypto-currency amid rapid changes in value. | |
What do people say about Bitcoin? | |
Regulators around the world have stepped up their warnings about its provenance as an investment. | 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. | 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. | 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. | 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. | 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. |