Bitcoin falls 30%, posts worst week since 2013 _ Business _ China Daily bitcoin share price chart

This may 1, 2014 photo taken in washington, DC shows bitcoin medals. (KAREN BLEIER / AFP)

NEW YORK/LONDON – bitcoin plunged by 30 percent to below US$12,000 on friday as investors dumped the cryptocurrency after its sharp rise to

A peak close to $20,000 prompted warnings by experts of a bubble.

After falling to as low as US$11,159, it recouped some losses to trade

Above US$14,000 on the bitstamp platform, down 9 percent on the day. It is down

Around 25 percent this week, its largest weekly loss since april 2013.

It capped a brutal week that had been touted as a new era of mainstream

Trading for the digital currency when bitcoin futures debuted on CME group inc,

The world’s largest derivatives market on sunday.

ALSO READ: bitcoin takes bigger wall street stage with smooth CME debut

Friday’s fall bled into the US stock market, where shares of companies

bitcoin share price chart

That have lashed their fortunes to bitcoin or blockchain – its underlying

Technology – took a knock. Long blockchain corp, overstock.Com inc, riot

Blockchain inc and marathon patent group inc lost between 2 percent and 15

Percent.

The biggest and best-known cryptocurrency has risen around twentyfold

Since the start of the year, climbing from less than US$1,000 to as high as US$19,666 on the luxembourg-based bitstamp exchange on sunday and to over US$20,000

On other exchanges. But it has fallen each day since.

The crypto markets have experienced several flash crashes over the past few years but we do believe there has been some overvaluation in the market, particularly over recent months

Jamie burke

Chief executive officer at venture capital firm outlier ventures

In the futures market, bitcoin one-month futures on cboe global markets

bitcoin share price chart

Were earlier halted due to the steep price drop, while those trading on the CME

Hit the limit down threshold.

The crypto markets have experienced several flash crashes over the past

Few years but we do believe there has been some overvaluation in the market,

Particularly over recent months, said jamie burke, chief executive officer at

Venture capital firm outlier ventures.

It’s much more likely this is a natural correction following

Over-exuberant market sentiment.

On friday, mike novogratz, the former macro hedge fund manager at

Fortress investment group, told bloomberg he had halted plans to launch a

Crypto-currency hedge fund.

We didn’t like market conditions and we wanted to re-evaluate what

We’re doing, he told bloomberg.

His galaxy digital assets fund was due to start on dec. 15, but he

Called clients on dec. 12 and told them he had changed his mind, novogratz said

bitcoin share price chart

In an interview with bloomberg.

Novogratz told reuters in november he hoped to raise about US$500 million,

Making it the largest fund of its kind.

Warnings about the risks of investing in the unregulated market have

Increased – denmark’s central bank governor called it a deadly gamble – and

There have been worries about the security of exchanges on which

Cryptocurrencies are bought and sold.

South korean cryptocurrency exchange youbit said on tuesday it is

Shutting down and is filing for bankruptcy after it was hacked for the second

Time this year.

READ MORE: S. Korea moves to prevent speculative investment in bitcoin

Coinbase, a US company that runs one of the biggest exchanges and

Provides digital wallets for storing bitcoins, said on wednesday it would

Investigate accusations of insider trading, following a sharp rise in the price

bitcoin share price chart

Of a bitcoin spin-off hours before it announced support for it.

On friday, coinbase said it had temporarily suspended buying and selling

Of bitcoin due to high traffic.

CRYPTO-RIVALS

As some rival cryptocurrencies slid along with bitcoin, the total

Estimated value of the crypto market fell to as low as US$440 billion, according

To industry website coinmarketcap, having neared US$650 billion just a day

Earlier.

But other cryptocurrencies rose this week, with investors moving into

Cheaper digital coins, rather than cashing out of the sector.

Ethereum, the second-biggest cryptocurrency by market size, soared to

Almost US$900 earlier in the week, from around US$500 a week earlier. Ripple, the

Third-biggest, has more than quadrupled in price since monday.

Stephen innes, head of trading in asia-pacific for retail FX broker

bitcoin share price chart

Oanda in singapore, said there had also been moves out of bitcoin into bitcoin

Cash, a clone of the original cryptocurrency. Oanda does not handle trading in

Bitcoin.

Most of it is unsophisticated retail traders getting burned badly,

Innes said on bitcoin’s recent retreat.

While some say the launch by CME and its rival cboe global markets of

Bitcoin futures over the last two weeks has given the digital currency some

Perceived legitimacy, many policymakers remain sceptical.

Bitcoin is known to go through wild swings. In november, it tumbled

Almost 30 percent in four days from US$7,888 to US$5,555. In september, it fell 40

Percent from US$4,979 to US$2,972.