The value of bitcoin plunged last week, amid concerns that trading was going to be banned in South Korea. It then stabilised briefly, before plunging again.
The volatile cryptocurrency hit a record high when it passed $19,850 in mid-December, but then tumbled rapidly, falling to below $12,000 within days.
Its value has shifted unpredictably ever since, with frequent wild drops and recoveries.
It is worth $11,003 as of Friday afternoon UK time, according to the Coinbase exchange.
Its value is down more than 6 per cent from a week ago and down more than 26 per cent from a month ago, but up more than 1,100 per cent from a year ago.
The South Korean government this week announced that, from 30 January, nobody in the country will be able to trade bitcoin and other digital currencies anonymously.
Theresa May has hinted that the UK government could introduce similar measures, and the US government has said it is concerned about bitcoin’s popularity amongst criminals.
Recent goings-on have demonstrated just how quickly things can change for investors.
The cryptocurrency’s value plummeted ahead of Christmas, dropping by almost $2,000 in just an hour at one point, and almost slipping below the $11,000 mark. It then bounced back, before tumbling again in mid-January.
Bitcoin is notoriously volatile, and its value is expected to continue to shift unpredictably.
Its rise has also led to increasing amounts of interest in other digital currencies, such as ethereum, litecoin and Ripple XRP, and more and more people are now looking to invest in digital currencies.
However, there are serious fears that bitcoin has created a bubble that could burst at any moment.
Numerous financial experts are advising potential investors to avoid getting involved with bitcoin, and the SEC has told people to “exercise caution” and be wary of scammers.
But others are speculating that it could keep rising towards the $1m mark.
Bitcoin only exists online, has no central bank and isn’t linked to or regulated by any state.
An anonymised record of every bitcoin transaction is stored on a huge public ledger known as a blockchain.
However, transactions made with the cryptocurrency are irreversible, which makes investors in bitcoin attractive targets for cybercriminals.
Source- Internet
