Bitcoin Frenzy Continues as the Cryptocurrency hits $USD15,900

BITCOIN prices on its biggest exchanges diverged wildly on Thursday in a session that sharply exposed the fragile trading infrastructure for the nascent cryptocurrency. In one wild 20 minute period, the price of bitcoin soared $2,000 per coin to more than $19,000 only to drop to $15,000 on the Coinbase trading venue. The frenzied demand left other exchanges struggling to cope, and the difference in prices quoted on other venues for the same bitcoin asset was as much $4,000. Bitcoin was trading at $15,900 on the leading global digital currency exchange, Bitstamp, at 03.47 GMT, down 4.2 per cent on the day.

“People are looking at a video game as a regular market. And it’s clearly not, otherwise it wouldn’t be where it is already,” said Walter Zimmermann, technical analyst at ICAP TA.

“It’s beyond abnormal, it’s unprecedented. Every other commodity has natural sellers.” The tumult came only days before the widely-anticipated first bitcoin futures contracts are due to start trading on Cboe Global Markets, the US derivatives exchange. Some investors are betting their introduction will temper the volatility in bitcoin’s price, by allowing traders to hedge their positions in the market.

On top of the price swings, the companies that service bitcoin trade came under severe pressure as demand for the digital currency continued to escalate. People are looking at a video game as a regular market . . . It’s beyond abnormal, it’s unprecedented Walter Zimmermann, ICAP TA Bitfinex, one of the largest bitcoin exchanges, said early on Thursday that it had been under “significant” denial-of-service attacks — which aim to jam servers by flooding them with requests — for several days and that ”the attack has recently worsened”.

The exchange said later in the day that it had returned to normal operations. Peter Smith, chief executive and co-founder at Blockchain.com, which provides “wallets” used for holding digital currencies, appealed to customers to “hang in there” as the site was experiencing “record traffic levels and customer support tickets”. IG Group, the UK’s largest online trading platform by market share, said it suspended trading of some bitcoin derivatives contracts “on and off” on Thursday, citing security risks associated with holding the cryptocurrency, after making a similar move when the price surged last week.

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