Specifically, Bitcoin Cash recorded the largest gain in the top 20 cryptocurrencies with a 52 percent overnight price increase. In theory, Bitcoin has officially entered a bear market having dropped more than 20% from its high.
The Dec. 22 fall bled into the US stock market, where shares of companies that have lashed their fortunes to bitcoin or blockchain - its underlying technology - took a knock. Long Island Iced Tea Corp. shares rose as much as 289 percent after the unprofitable Hicksville, New York-based company rebranded itself Long Blockchain Corp.
However, bitcoin and bitcoin cash fell Thursday, and losses accelerated in the evening.
The global crypto market has lost billions of dollars this week alone.
And according to some analysts, investors must prepare for such rapid changes, because this type of fluctuations have characterized this asset since its inception. Three of the top five XRP trading markets are fiat currency pairs, which is pretty interesting to keep an eye on.
"Investors may have also been put off buying bitcoin at those elevated levels amid repeated warnings from experts about the way it had climbed near $US20,000". Shortly afterward, it said that because of high traffic, buys and sells were still disabled.
And all the while, my thesis at all times is that Bitcoin-or any other cryptocurrency-could reach new highs or fall to nothing at any given moment.
The losses are a big test for the cryptocurrency, which has been facing accusations of being a bubble for most of the year. At the time of writing, the price of bitcoin had recovered to $12,835. Goldman Sachs Group is setting up a trading desk to make markets in digital currencies such as bitcoin, according to people with knowledge of the strategy.
Takashi Hiroki, Monex Securities Chief Strategist in Tokyo says, "Trading in bitcoin is akin to gambling, so its movements don't follow logical patterns". In November, it tumbled nearly 30 per cent in four days from US$7,888 to US$5,555. In September, it fell 40 per cent from $4,979 to $2,972.