Is bitcoin back? Cryptocurrency passes $US16,000 as rebound begins
Bitcoin rallied past $US16,000 ($20,705) on Tuesday US time as traders of the world’s biggest digital currency sought to draw a line under its rollercoaster five-day slump.
The tokens rose 16 per cent to as much as $US16,132.09, the biggest gain on a closing basis in more than two weeks and the first in six days. It traded higher by 14 per cent to $US15,659.9 as of 1.36pm in New York. Rival currencies litecoin and ethereum were up 4.4 per cent and 2.6 per cent, respectively, according to data compiled by Bloomberg.
High trading volumes at Coinbase, one of the biggest exchanges, forced the company to issue a warning on its website that transactions for bitcoin and ether may be delayed by several hours.
The gains will be a welcome relief for crypto bulls, after bitcoin declined 26 per cent in the five days through Monday in what was seen as a big test for the nascent digital currency industry. The advance suggests that, even as financial authorities issue warnings about the risks of a bubble in the asset class, investor interest remains intact, at least for now.
“The most important question facing it is whether the recent price correction will prove to be what market participants refer to as ‘healthy’,” Mohamed El-Erian wrote in a Bloomberg View column Tuesday. In other words, one that shakes out “excessive irrational exuberance, provides for the entry of institutional investors, encourages the development of market-deepening products, and widens and balances out the investor base and the product offering”, he said.
Beaten by rivals
The answer to that question may determine bitcoin’s future as a debate rages over the sustainability of the rally that has increased it more than 1500 per cent this year. Bulls say the nature of the cryptocurrency and the blockchain technology behind it is a game changer for the world of finance, while bears say it has no intrinsic value and price moves display the hallmarks of a speculative asset bubble.
Amid bitcoin’s wild price ride, attention is also increasingly turning to rival digital tokens. Since the largest cryptocurrency hit a record $US19,511 on December 18, it has actually underperformed peers such as ripple and ethereum.
To read more, please click on the link below…
Source: Is bitcoin back? Cryptocurrency passes $US16,000 as rebound begins | afr.com
