Why is Bitcoin going down? Price of cryptocurrency plunges by a third in five days

Some recent Bitcoin buyers have described trying to actually use bitcoin for purchases, only to run into the reality of the network’s absurdly high transaction fees. Those fees have risen steadily for years due to crowding on the network.

Bitcoin has gone into freefall after its price collapsed by about one third in just five days.


According to Coindesk, the cryptocurrency was trading at 13,155 (£9,822) after its value plunged by $2,000 US dollars in the space of 12 hours. It comes after a troubled week for Bitcoin in which a cryptocurrency exchange went bust in South Korea following a cyber attack. Coinbase, another exchange based in the US, also said it was opening an investigation into sharp price increases in the price of a new cryptocurrency called Bitcoin Cash. Neil Wilson, a senior market analyst at ETX Capital, said: ‘Has the bubble finally popped? It’s hard to see the bell tolling just yet. ‘Large price swings have become so normal that it’s hard to decide – we can easily see this market bounce back in very short order.

‘Whilst there have been some hacks, public infighting in the mining community, lots of rumoured forks and regulatory pressure building on some fronts, this is likely to be a simple bout of risk-off selling as investors rebalance towards year-end. ‘It looks like it’s time to cash in the gains and spend the winnings on a bumper Christmas.’ But it hasn’t all been bad news this week. The Chicago Mercantile Exchange (CME) launched its own bitcoin futures trading on Monday, indicating confidence in the digital currency.

US regulators also approved futures trading in Bitcoin earlier this month and Goldman Sachs is reportedly gearing up to enter the market. The Treasury has announced plans to monitor cryptocurrency as part of an EU-wide scheme requiring online platforms that trade in Bitcoin to report suspicious transactions and verify the identity of traders. But that has not curbed excitement over its emerging investment opportunities. Despite its Friday flop, the currency is still well up on the year, shooting up from around $900 (£672) in January.