Bitcoin traded between gains and losses Wednesday as a recovery from its pre-Christmas slump stumbled.
The largest cryptocurrency traded 1.6 per cent lower around US$15,669 at 10:46am in London, having earlier climbed as much as 3.6 per cent. Among rival digital currencies, ripple extended its gains and was trading 6.8 per cent higher, while ethereum and litecoin fell 1.2 per cent and 3.1 per cent respectively, according to data compiled by Bloomberg.
Bitcoin’s volatility is adding to an ongoing debate about how to value the digital coin which has surged about 1,600 per cent this year.
“Nobody knows the ultimate value of this underlying asset,” Edward Stringham, president of the American Institute for Economic Research, a Massachusetts-based research group, said on Bloomberg Television. “We cannot predict whether it’s going to be zero or one million dollars or anything in between.”
For skeptics doubting whether individuals and businesses will truly start using bitcoin as a medium of exchange - as opposed to some officially backed digital currency - the short-lived rebound from the past week’s selloff portends further declines.
“It’s much more likely once you’ve made a big downward movement like the one we made last week that you have a bigger and more complex correction,” Ric Spooner, a Sydney-based analyst at CMC Markets, told Bloomberg Television. “Once a market like this one locks into those patterns it becomes pretty good” to follow via chart-based analysis, he said.
Spooner said it’s possible bitcoin could drop to $5,700 or $8,700 in coming months.