After hitting a record high of more than $19,00o per coin on Thursday, bitcoin tumbled by more than $2,000 on Friday.
This is only the latest development in what has been a tumultuous year for investors in the currency, says Nigel Green, founder and chief executive of deVere Group, in a Friday release. “This correction is an appropriate one after such frenzied trading,” he adds. “We should expect to see Bitcoin see-sawing in coming weeks.”
Green attributes market excitement over bitcoin to “increased interest in this exciting new alternative currency,” he says, “especially with the Chicago Board Options Exchange allowing investors to trade bitcoin futures in the next few days, driving hikes.”
As cryptocurrencies become more established, he forecasts they’ll “gain in popularity, and the growing cryptocurrency mania will likely result in the launch of more and more digital currencies to meet demand.”
They won’t all survive, Green says. “One or two of the existing ones will succeed, [but] whether it’s bitcoin or not remains to be seen.”
The Financial Times reported on Thursday (subs only) that investors expect the introduction of bitcoin futures will help “temper the volatility in bitcoin’s price,” given hedging will be possible. Another factor to consider, says FT, is “bitcoin developers have struggled to overcome the network’s capacity issues for many years,” and security risks are on investors’ radar.
Also read: Bitcoin buoyed by investor behaviour