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Bitcoin rebounds over $1,000 after losing almost a third of value

Reuters  |  LONDON 

By Jemima Kelly

(Reuters) - surged on Monday, recovering more than $1,000 after losing almost a third of its value in less than four days as traders bought back into the volatile cryptocurrency.

tumbled in the second half of last week, falling as low as $5,555 on the Luxembourg-based Bitstamp exchange on Sunday, a slide of almost 30 percent from a record high just shy of $7,900 on Wednesday..

It rebounded on Monday, trading up more than 14 percent on the day at $6,718, though that was still more than $1,000 less than last week's record high.

Market-watchers said the fall had been driven by a decision on Wednesday to abandon a planned software upgrade that could have split the cryptocurrency in a so-called "fork" - a move that had initially had a positive impact on the digital coin, sending it to a record high of $7,888 on the view that this marked a resolution of a long-term dispute.

But some were disappointed that "Segwit2x" fork had been abandoned. It would have increased the capacity of the "blocks" transactions are processed in, thereby reducing competition to get payments processed and lowering transaction fees.

Consequently, analysts said, some of those who see low fees as important to the future of were selling it for a clone called Cash that spun off from the original in August. Its block sizes are larger, and therefore transaction fees are lower.

Cash tripled in value at the end of the week as slid, reaching an all-time high just below $2,000 on Sunda and briefly overtaking Ethereum as the world's second-biggest cryptocurrency.

But traders bought back into the original on Monday, sending Cash plummeting. It was trading down over 30 percent on the day at around $1,097, according to industry website Coinmarketcap.

"and Cash will co-exist and serve different use cases, just like and Ethereum. It's not a zero sum game," and security expert Andreas Antopolous said in a post on Twitter.

is up more than 500 percent so far this year.

(Reporting by Jemima Kelly, editing by Larry King)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, November 13 2017. 18:48 IST
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