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Bitcoin plummeted just hours after setting yet another record
Bitcoin (Exchange:BTC=) dropped to as low as $14,095.62 Friday morning just after 6:30 a.m. ET, according to industry site CoinDesk. That was a nearly 18 percent decline from earlier highs on the day of $17,153.94, according to the site, which averages prices from major exchanges. In fact, bitcoin had actually rocketed above $19,000 on Thursday on the Coinbase exchange. The digital currency hit a high of $19,340 on that platform before notching a huge decrease. The price on Coinbase, one of the major cryptocurrency exchanges accounting for a third of bitcoin trading volume, is often at a premium over other platforms. "It goes without saying that prices have reached a level where sentiment is exhibiting short-term euphoria," Mark Newton, managing member at Newton Advisors, wrote in an earlier note to clients. "But to think prices are at mania levels where this could suffer a serious crash here… is a bit ridiculous." "I truly don't think people are involved on a mass scale yet. We've heard the fraud claims. Now we need people profiting immensely all around us and making forecasts for $1 million, etc., for it to truly have reached a euphoric peak," Newton said.
The latest swing higher came as bitcoin topped $12,000 Tuesday night in a rapid recovery from a 20 percent drop last week. The digital currency began the year below $1,000 and its gains have accelerated as investor interest grows. Chicago-based Cboe Global Markets (CBOE) is planning to launch bitcoin futures on Sunday, while the world's largest futures exchange, CME (CME), is set to launch its futures product the following week. The addition of bitcoin futures by two respected exchanges marks another step towards establishing the digital currency as a legitimate asset class. However, many remain critical of bitcoin. JPMorgan Chase CEO Jamie Dimon has called bitcoin a "fraud." Digital currency investor and former Fortress hedge fund manager Michael Novogratz also said last week that cryptocurrencies like bitcoin are "going to be the biggest bubble of our lifetimes." Novogratz also predicted last week that bitcoin could reach $40,000 by the end of next year. —CNBC's Evelyn Cheng and Fred Imbert contributed to this report.
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