Bitcoin Volatility Intensifies While Exchanges Struggle With DemandBy and
Cryptocurrency declined as much as 11 percent in New York
Coinbase says trading still hampered on its online exchange
Bitcoin continues its reversal from the all-time high, slumping as much as 11 percent Thursday, as online exchanges struggle to keep up with a jump in customer interest.
After surging past $11,000 on Wednesday, the biggest digital currency has swung between gains and losses of as much as 20 percent on an intraday basis. The volatility has weighed on the prices of rival digital coins such as ether and bitcoin cash.
"Yesterday was ‘epic’ in terms of bitcoin volatility, even by bitcoin’s standards," Peter Tchir of Academy Securities wrote in an email.
Coinbase Inc., one of the world’s largest virtual currency exchanges, posted a announcement on its website saying trading still wasn’t back to normal after experiencing service outages and delays Wednesday. Adding to the uncertainty, the San Francisco-based company lost a bid to block an Internal Revenue Service investigation into whether customers haven’t reported their cryptocurrency gains.
All of the top 100 digital tokens, aside from tether, have faced price declines in the past 24 hours, according to Coinmarketcap.com.
"When it’s that lofty and it’s that high, any negative news about the coins will probably at least send it tumbling a little bit," said Morgan Hill, managing partner of cryptocurrency hedge fund AxionV. "Now the question is will the buyers come right back?”
Price swings in the world’s most popular digital currency are increasing as this year’s rally captivates everyone from mom-and-pop investors to high-frequency traders and Wall Street banks. While the frenzy prompted bubble warnings from observers including Nobel laureate Joseph Stiglitz, interest among traders shows few signs of abating.
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