Bitcoin is dropping fast as speculators cash out after its recent spike (BTC)

Bitcoin is dropping fast as speculators cash out after its recent spike (BTC)

May 17, 2019 Off By readly




Bitcoin

  • Bitcoin slumped more than 8% on Friday as speculators cashed out.
  • The decline probably reflected profit-taking and algorithmic trading, according to one expert.
  • Bitcoin had surged from $5,000 to more than $8,000 this month, but still trades well below its peak of $19,000 in December 2017.
  • Watch bitcoin trade live.

Bitcoin slumped more than 8% to below $7,200 on Friday as investors cashed out following the cryptocurrency’s breathless rise this year. The prices of other cryptocurrencies such as ethereum and litecoin slid by a similar amount, while bitcoin cash and ripple dropped around 12%.

The cryptocurrency’s latest tumble probably reflected profit-taking and algorithmic trading exacerbating the decline, said Jehan Chu, co-founder of Kenetic Capital, in an interview with CNBC. The total market capitalization for the cryptocurrency industry has shrunk by about 9% to around $225 billion in the past day, according to data from CoinMarketCap.

The price of bitcoin had surged to nearly $8,200 earlier this week, more than doubling its value since the start of the year. There are several theories about what caused the spike, including the US-China trade war, growing institutional interest, an exodus from risky "alt-coins," a lawsuit against the owners of the Bitfinex exchange, and the hacking of the Binance exchange

Given bitcoin’s sharp rise, "it is no surprise we have seen a small adjustment," Marcus Swanepoel, CEO of Luno, a cryptocurrency company, said in a note. "Data will almost certainly show that a number of people who bought on the last major price rise will now be exiting at a price which covers their initial investment."

Bitcoin still trades more than 40% above its $5,000 level at the start of May. However, it remains well short of the $19,000 peak it reached in December 2017.

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SEE ALSO: Here are 5 theories for the Bitcoin price spike

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Source of this (above) article: https://markets.businessinsider.com/currencies/news/bitcoin-price-drops-speculators-cash-out-2019-5-1028210940