The bitcoin market has taken a 25 percent tumble over the last few days after briefly touching an all-time high price of $7,900 per unit of bitcoin. A missed software upgrade, uncertainty over the launch of bitcoin futures and concerns about an asset bubble were all weights against the digital currency’s price — which fell to below $6,000 over the weekend.
As of Monday morning, the price had recovered to just north of $6,400.
The drop aside, however, bitcoin remains way up on the year — 500 percent — and has a market cap of an estimated $100 billion. This most recent plunge is the fifth time this year the price has fallen more than 20 percent, according to CoinDesk.
A plan to split the digital currency had been expected last week but was suspended. The split represents a division of thought in the bitcoin community. The new version of bitcoin proposed by one faction would, in essence, create a faster bitcoin that would trade more easily. They are rather angrily opposed by a group of bitcoin’s main software developers. The software change would have roughly doubled the network’s processing capacity, or the number of bitcoin transactions the network can handle.
Traders are also getting nervous about the potential of bitcoin’s future. Thomas Peterffy, one of the world’s most successful derivatives traders, said he was concerned bitcoin derivatives would introduce extraordinary volatility that would be difficult to contain.
“For the first time, I am extremely scared,” Mr. Peterffy, founder and chairman of Interactive Brokers Group, told Barron’s, citing concerns about the stability of Wall Street’s smaller clearing firms.
There is also a concern — as bitcoin’s price has trended skyward — that this is one of the largest financial bubbles of all time.
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