All eyes may be on bitcoin, but it seems that for many traders it’s been “eyes on, hands off” in the past few trading sessions. After hitting a record high of $11,388.33 on Monday, the world’s most popular cryptocurrency plummeted to just $9,290.30 before recovering. Bitcoin was trading at $10,209.01 as of 2:14 p.m. HK/SIN on Thursday, according to Coinbase. The inherent volatility of the cryptocurrency market has made bitcoin extremely difficult to trade, and has made professional traders wary of buying the dips, as they normally would for stocks or other assets. Likewise, since there is no fundamental value to any cryptocurrency, and the value is based entirely on supply and demand, it’s nearly impossible to predict when the demand will end, making bitcoin and its crypto peers a difficult choice for fund managers.
Bitcoin wasn’t the only digital currency to stumble on Wednesday and Thursday. Ethereum fell nearly 14 percent from its all-time high during the same period, while bitcoin cash lost 5 percent on Wednesday.
Asian Markets Also Struggle
Asian shares were broadly lower on Thursday, owing largely to declines in the technology sector. Australia’s ASX200 was down 0.69 percent, the Shanghai Composite was down 0.58 percent and South Korea’s Kospi lost 1.15 percent by mid-afternoon in Hong Kong. Asian declines followed a down day for U.S. shares which was also lead by technology struggles. Amazon, Apple and Google all fell at least 2 percent on Wednesday, while Netflix faced a 5.5 percent slide.
While some investors are worried about the losses, others are speculating that this is the beginning of a much-needed correction, perhaps spearheaded by traders taking profits in advance of the new year.