Tokyo: The cryptocurrency-Bitcoin which was soaring high recording closely to $20,000 with this week’s beginning, has now dropped to 30% that is briefly below $14,000 as reported today at the Bitstamp exchange.
The cryptocurrency which became sensational all over media reached as high as $19,666 on Sunday but dropped after the launch of giant CME Group’s bitcoin futures. The cryptocurrency was about $1,000 in the year’s beginning.
The bitcoins success has brought cryptocurrencies into the limelight as a new business. The surging success of Bitcoins has also boosted its rivals- Verge and Ripple who are offering alternatives to bitcoins.
Speaking on the sudden Bitcoin drop, Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers in Sydney said, “Keep in mind that bitcoin has gone up a lot this year, so a correction is always likely.”
“A lot of the capital is flowing from bitcoin into alternative coins. You’ve seen companies like Verge and Ripple, which are over 400 percent in the last week,” Chanel at ASR Wealth Advisers said.
Stephen Innes, Trading head of Asia-Pacific for retail FX broker Oanda in Singapore, said Bitcoin cash or a clone of original cryptocurrency is now in the market.
“Most of it is unsophisticated retail traders getting burned badly,” Innes said reacting on Bitcoin’s drop.
Takashi Hiroki, Monex Securities Chief Strategist in Tokyo says, “Trading in bitcoin is akin to gambling, so its movements don’t follow logical patterns.”
He added, “Unlike equities and bonds, it is not possible to calculate expected returns on bitcoin, so buying it becomes a gamble rather than an investment.”
Meanwhile, South Korea’s Financial Supervisory Service on Tuesday confirmed it does not consider cryptocurrency as a currency.
Japanese Finance Minister Taro Aso has also said on Tuesday that bitcoin’s have not yet proven as a credible currency, Reuters reported.