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BILLIONS of dollars were wiped out within minutes from the market capitalisation of bitcoin (BTC), as the cryptocurrency experienced a sudden and unexpected plunge in value today.
BTC has experienced a sudden drop in its value after a stable few months of trading, as five percent was shaved off its price almost instantaneously.
Other leading cryptocurrencies, ripple and ethereum, were dragged down with it as the price plummet caused a ricochet effect on the whole cryptocurrency market.
The world’s leading cryptocurrency had entered a period of remarkable stability as the asset hit a 17-month volatility low in September.
But the steady spell appears to be over, with the digital asset taking a huge price hit causing $13billion to be lost in minutes, according to CoinDesk data.
The decentralised digital commodity’s price fell sharply to $6,125 (£4,629) but it did recover briefly to $6,200 (£4,686).
At the time of writing, one bitcoin is worth £4,696.
Short and sudden swings in bitcoin’s price are often attributed to trading “bots”, which initiate trades and cause a domino effect on the price.
So-called “whales” (holders of huge amounts of cryptocurrency) can also cause price fluctuations, as they buy and sell amounts so vast they impact the whole market rate.
The news comes after the International Monetary Fund (IMF) warned this week the bitcoin and blockchain boom facilitating the “rapid growth” of cryptocurrency assets could create “new vulnerabilities in the international financial system”.
In a key report published on Wednesday, the Fund said: “Cybersecurity breaches and cyber attacks on critical financial infrastructure represent an additional source of risk because they could undermine cross-border payment systems and disrupt the flow of goods and services.
“Continued rapid growth of crypto assets could create new vulnerabilities in the international financial system.”
Bitcoin’s receding price (down from extreme highs of more than £15,000 last year) is indicative of the cryptocurrency’s unpredictability, making it an uncertain form of investment
By SAM STEVENSON
PUBLISHED: 05:34, Thu, Oct 11, 2018 | UPDATED: 05:36, Thu, Oct 11, 2018
