22 Dec 2017
The price of bitcoin has tumbled down by around 30% with indications that news of hacking and an insider trading probe at two cryptocurrency exchanges may have had a negative impact on the digital currency’s performance this week.
There was also a warning this week about investing in bitcoin, this time from Denmark’s central bank governor, who called bitcoin a ‘deadly gamble.’
His remarks add to similar statements made by other central banks and financial watchdogs in Europe and elsewhere.
According to the CoinDesk exchange, on Friday bitcoin was trading at around around $13,000 – $14,000, down from its ecstatic $20,000 quoted earlier in the week.
Bitcoin’s headline-breaking price rise is closely watched by traders and critics alike, rising from about $900 in January to about $13,000, and then surging ahead in recent months, weeks and then days.
Despite its highs, this has been a rocky week for the controversial currency.
Monday kicked off with news that major cyptocurrency exchange Coinbase had decided to suspended a new offering called bitcoin cash after it launched an investigation into possible insider trading by staff.
Coinbase CEO Brian Armstrong said the firm would be conducting the investigation considering the price rise in the hours leading to the launch.
“If we find evidence of any employee or contractor violating our policies — directly or indirectly — I will not hesitate to terminate the employee immediately and take appropriate legal action,” he said in his blog.
There was also an announcement from South Korean cryptocurrency exchange Youbit that it was shutting down and filing for bankruptcy after it suffered a cyber attack.
“We lost our coin purse due to our hacking. The coin loss [is] about 17% of total assets. The other coins were kept in the cold wallet and there were no additional losses,” it stated.
A cold wallet is a secure store used to hold assets not being traded.
Youbit, which had been hit by another cyber attack earlier in the year, said it would seek to minimise damage to its members.
South Korea’s Internet and Security Agency (Kisa) has reportedly launched an inquiry into how the hackers gained access. KYC360 contacted KISA for a comment but it did not respond.
Despite the setbacks this week, there have been some positive developments for bitcoin too this week – on Friday, Bloomberg reported that Goldman Sachs is to launch a bitcoin trading platform by June next year.
On Monday the Chicago Mercantile Exchange launched its bitcoin futures trading platform, the second such type after the Chicago Board Options Exchange’s operation.
You can claim CPD minutes for reading this article, by signing up to our CPD WalletFREE CPD Wallet