The January roller coaster for cryptocurrency investors eased on Thursday as Bitcoin held onto gains after roaring back from its first plunge below $10,000 since December.
Bitcoin climbed 6.1 percent to $12,069 at 10:48 a.m. in New York, Bloomberg composite pricing showed. It stayed above $10,000 all day, following a frantic 24 hours in which the token swung through a $2,600 range. Rivals ethereum and litecoin both rose more than 5 percent, while Ripple jumped 26 percent.
Any big figure like ‘$10,000’ or ‘$20,000’ can be perceived as a psychological level for traders in any market,” said Daire Ferguson, chief executive officer of Irish online currency platform AvaTrade. “But markets are fickle. Trends are always there to be broken, or re-defined.”
Bitcoin is mounting its best two-day performance of 2018 amid almost daily criticism of the free-wheeling, half-a-trillion-dollar world of digital coins by authorities from Russia and South Korea to the U.S. that have put investors on edge.
“The regulatory crunch is coming,” said Neil Wilson, market analyst in London for online trading platform ETX Capital. “But because regulators have yet to do anything seismic, there is still plenty of buyers to be found -- second-wave buyers who’d feared they’d missed out on the boom, choosing to enter the market at more attractive prices.”
Comparing the asset class to Viagra, which was discovered in heart-medicine research, a Russian central banker Wednesday said that holders of cryptocurrencies now view them not as a means of payment, but as an investment asset.
Crypto as ‘Pyramid’
“It’s absolutely clear that regulators won’t do anything to facilitate the promotion of these pyramids,” first deputy governor at Bank of Russia Sergey Shvetsov said.
The week isn’t bereft of positive news for digital coins. Morgan Stanley Chief Financial Officer Jonathan Pruzan said the bank has been clearing Bitcoin futures contracts for big institutional clients and convenes a regular meeting of executives to consider how else to engage with cryptocurrencies.
Even so, Bitcoin’s gyrations in 2018 have investors, regulators and onlookers debating whether the speculative bubble may have popped after a 1,400 percent ascent last year. Jitters across the globe over a potential bloodbath helped wipe as much as $400 billion off the global market value of digital assets from its Jan. 8 high through mid-Wednesday.
Shy of Capital
“This market is volatile and there is not enough capital in it to stabilize,” Darren Franceschini, chief executive with Blockchain Technologies Consulting, said in an email.
While South Korean authorities are debating a potential ban on local exchanges, China seems to be widening its crackdown on the industry.
Bixin, one of China’s larger operators for the so-called wallets that hold digital coins, said it was suspending all OTC trading and escrow trading on Wednesday, blaming “uncertainties regarding regulation policies.” No re-start date was set.