On Wednesday, the price of Bitcoin maintained below record levels after on Monday the cryptocurrency exceeded the level of $8,000, increasing fears about inflation of the bubble in the cryptocurrency market.
On the American Bitfinex exchange, Bitcoin was traded at $8,270.90.
On Tuesday, Bitcoin reached a historic high of $8,310.20, but then lost more than $400. The decrease was due to the reported theft of $31 million tokens in the USD-pegged Tether cryptocurrency. The incident renewed concerns about the security of digital currencies.
Bitcoin price often jumps up and down, but usually it quickly recovers after each collapse.
Since the beginning of this year, Bitcoin has risen in price by more than 700%. After three corrections of over 25%, each time there was an even stronger rally. To date, the market capitalization of the Bitcoin market is approximately $ 137 billion.
The recent volatility in the markets was due to the fact that investors turned their attention to alternative cryptocurrencies, in particular Bitcoin Cash. This led to an increase in the cost of Bitcoin Cash to a historic high.
A rapid increase in the Bitcoin rate raised fears about inflation of the bubble in the cryptocurrency market. Bitcoin is still rarely used to buy real goods or services, which turns it into a tool for speculation.
In October, JPMorgan Chase (NYSE: JPM) CEO James Daimon said that bitcoin was fraud, and UBS analysts in their latest mailing to investors warned that Bitcoin was a “speculative bubble.”
The recent rise in the cost of bitcoin is associated with the spread of the so-called ICO (Initial Coin Offering), in which start-ups create a new virtual token and put it on open sale.
According to Coindesk, more than 160 ICOs were held this year, attracting more than $3 billion.
The sharp increase in unregulated trading in digital tokens prompted US Securities and Exchange Commission (SEC) Chairman Jay Clayton to warn investors that many of these ICOs involve manipulation and other forms of fraudulent activity.
However, investors retain positive forecasts for the digital currency after the largest North American operator of financial derivatives CME Group (NASDAQ: CME) said it would start trading Bitcoin futures this year.
At the time of this writing, Bitcoin Cash has risen by about 9% and traded at $1,308.30.
Ethereum fluctuates around $367.