Bitcoin dropped overnight and with a new decline shortly after 7 am. Prices dropped to as low as $12,500.
The cryptocurrency has lost about a third of its value ever since hitting all-time highs of nearly $20,000 earlier this week.
According to Coindesk, Bitcoin dropped to $13,078 shortly after 3 am before regaining its ground. Then in a new dive at 7:20 am, Bitcoin prices hit $12,504.
Shane Chanel, an ASR Wealth equities and derivatives trader, told Reuters: “Keep in mind that bitcoin has gone up a lot this year, so a correction is always likely.”
Takashi Hiroki, the Monex chief strategist, added: “Trading in bitcoin is akin to gambling, so its movements don’t follow logical patterns.
Unlike bonds and equities, it is not possible to calculate the expected returns on bitcoin, so purchasing it becomes a gamble instead of an investment.
Yesterday, UBS, the Swiss investment banking giant, slammed bitcoin, saying that it was not “a viable investment.”
“We believe this has all the hallmarks of a bubble. High turnover, against limited real-world use, suggests that many buyers are seeking speculative gain. And while the supply of bitcoins is limited, the broader stock of cryptocurrencies is not, with thousands of potential substitutes,” wrote UBS.
UBS did say that it saw opportunities in the blockchain technology that underpins cryptocurrencies.