High volatility isn’t going away for bitcoin, raising questions about whether the digital currency can be a sustainable investment asset.
Late Saturday, the crypto-currency plunged 15 percent from nearly $6,500 to a low of $5,507, before intermittently shooting back up to near $6,400, according to CoinDesk. Bitcoin last traded near $6,060, down about 4 percent on the day.
Trading in a U.S. stock index is typically halted after such an extreme drop, not to mention repeated swings higher or lower. However, more than 120 “cryptofunds” have emerged to invest in bitcoin, other digital currencies and related business projects, according to financial research firm Autonomous Next.
Analysts say a major factor behind bitcoin’s seven-fold surge to record highs this year is increased interest from institutional developers.
Bitcoin in the last 24 hours
Critically, the latest swings in bitcoin also reflect disagreement among digital currency developers about the future of bitcoin. As the original bitcoin tumbled, supporters of offshoot bitcoin cash, took to promoting it over the weekend on Twitter.
Bitcoin has retraced in the last few days, despite initially rising to a record high of $7,879. Last week, developers called off an upgrade called SegWit2x, initially planned for around Nov. 16.
The proposal was an attempt to improve bitcoin’s transaction speed and cost. But support for SegWit2x waned in the last few months.
Meanwhile, bitcoin cash soared to a record high of around $2,477 overnight, before crashing about 50 percent to a low near $1,224 Sunday afternoon, according to CoinMarketCap. Trading volume in bitcoin cash over the last 24 hours was around $7.9 billion, versus $8.6 billion for the original bitcoin, according to CoinMarketCap.