17:00, Thu, Jul 27, 2017
THE BITCOIN price is continuing to bounce back despite a billionaire investor warning that digital currencies are “nothing but a unfounded fad”.
Investor Howard Marks, who predicted the financial crisis and dotcom bubble implosion, warned that cryptocurrency is a nothing more than a fad or pyramid scheme style scam.
He said: ”In my view, digital currencies are nothing but an unfounded fad (or perhaps even a pyramid scheme), based on a willingness to ascribe value to something that has little or none beyond what people will pay for it.”
The co-chairman of Oaktree Capital, compared cryptocurrencies to the Tulip mania of 1637, the South Sea bubble of 1720 and the internet bubble of 1999.
In an investor letter, he said: ”Serious investing consists of buying things because the price is attractive relative to intrinsic value.
”Speculation, on the other hand, occurs when people buy something without any consideration of its underlying value or the appropriateness of its price."
Bitcoin suffered a crash earlier this month but has since bounced back and is now up by almost nearly 160 per cent this year.
On Wednesday Bitcoin briefly fell as low as $2,433.83, its lowest price since the cryptocurrency dramatically rebounded last week.
The volatile digital currency saw a surge last Thursday after miners backed a new upgrade of the system designed to solve the cryptocurrency’s scaling issue.
Although Bitcoin narrowly avoided a fork this month, there are still concerns that digital currency is at risk of splitting into two versions.
Here is the latest Bitcoin news, prices and live updates (All times BST).
5.05pm: Today’s high is $2,615.38 and today's low is $2,541.71 so far, according to CoinDesk. Bitcoin opened at $2,550.18 today.
11.30am: Bitcoin briefly fell below $2,500 on Tuesday and Wednesday. Last Thursday the price rose sharply after most developers backed BIP 91, a upgrade to the bitcoin system.
The BIP 91 lock-in was hailed as a victory as miners agreed to cement the first part of a larger effort to upgrade bitcoin, called Segwit2x.
Alex Sunnarborg, research analyst at CoinDesk, told CNBC: "I believe the market is currently somewhat torn between the optimism around BIP 91 locking in, which could lead to SegWit activating if all goes smoothly, and the fear of the second half of SegWit2x proposal, the 2MB block size hard fork, still being contested.”
9am: A US jury has indicted a Russian man as the operator of a digital currency exchange he allegedly used to launder more than $4 billion for people involved in crimes ranging from computer hacking to drug trafficking.
Alexander Vinnik was arrested in a small beachside village in northern Greece on Tuesday, according to local authorities.
US officials described Vinnik in a Justice Department statement as the operator of BTC-e, an exchange used to trade the digital currency bitcoin since 2011.
They alleged Vinnik and his firm "received" more than $4 billion in bitcoin and did substantial business in the US without following appropriate protocols to protect against money laundering and other crimes.
US authorities also linked him to the failure of Mt. Gox, a Japan-based bitcoin exchange that collapsed in 2014 after being hacked.
Vinnik "obtained" funds from the hack of Mt. Gox and laundered them through BTC-e and Tradehill, another San Francisco-based exchange he owned, they said in the statement.
8.30am: According to Sheba Jafari, head of technical strategy at Goldman Sachs, bitcoin needs a "few more swings" before the upward trend continues.
"Anything above 3,000 (Jun 13th high) will suggest potential to have already started wave V, which again has a minimum target at 2,988 and scope to reach 3,691 (the latter being a preferred target as this assumes a new high)," Ms Jafari wrote in a note to clients.
Goldman Sachs said Bitcoin is "still within the limits of a well-defined range", adding: "At this point, it seems reasonable to assume that the market is in a corrective process until there's been real evidence of an impulsive advance."