We’re getting an early reminder today that bitcoins extreme volatility works both ways, with the cryptocurrency tumbling more than 10% and extending it’s losses since peaking yesterday to almost 20%.
The sudden plunge has been widely attributed to another crash, that of Coinbase, the US crypto trading platform. Perhaps this was just a convenient opportunity to lock in some profits or maybe it’s a reminder just how influential one exchange is and therefore how sensitive prices are to these kinds of outages. Maybe both of these are true but it will be interesting to see just how quickly prices recover.
This is a wild market and I wouldn’t be surprised if bitcoin ends the day in the green. Even if it doesn’t, the coming days will likely be no less eventful which usually means large moves. Today strikes me as more of a setback than a game-changer, we only briefly traded below yesterday’s open, that doesn’t suggest to me that traders are completely panicking yet.
That said, one thing that’s always been clear about bitcoin is that it’s very unpredictable, especially during it’s most volatile periods. I expect this will be no different.