The Crash of Bitcoin has Started

Bitcoin briefly plunges more than 40 percent from its all-time high reached Sunday, according to Coinbase.
Trading on Coinbase was disabled for more than two hours in the middle of the day.
CME’s bitcoin futures expiring in January reached ‘limit down,’ off 20 percent.
Stocks that have soared dramatically on speculation around their connection to bitcoin and its underlying blockchain technology also fall.

Bitcoin plunged Friday, taking the digital currency briefly below $11,000 and down 47 percent from a record high hit at the start of the week.

Bitcoin had rallied to a record high above $19,800 on Sunday and was trading near $15,500 for much of Thursday New York time, according to Coinbase. But an afternoon selloff accelerated into the night, and bitcoin dropped 30.2 percent Friday morning to a low of $10,400 on Coinbase. It had recovered above $14,600 by Friday afternoon, off 27 percent from the all-time high.

There were no immediately apparent explanation for the selloff and extreme volatility.

“I would say the drop in bitcoin is a result of the massive new inflows of retail investors who are relatively ‘weak hands’ and more prone to sell at the sight of falling prices than the capital that has been in the system for a while that has a longer term outlook,” Alex Sunnarborg, founding partner at cryptofund Tetras Capital, said in an email.

Adding to the confusion, trading on Coinbase was disabled for more than two hours in the middle of the day. The company had more than 13 million users at the end of November.

At its lows, bitcoin had fallen 47 percent in just five days and lost about $9,400. The digital currency erased more than $1,000 in one hour alone Friday morning.

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Maddy Taylor

Journalist and fact checker at The Pluto Daily. University of Miami Ohio alumni class of '09!