Bitcoin slid on the cryptocurrency exchange Bitstamp, losing nearly 10 percent to $15,800 on Wednesday.
It has continued to slide after achieving record highs of $19,666 following the launch of bitcoin futures on the CME exchange on Sunday. One week earlier Cboe launched bitcoin futures, causing their website to falter from the heavy amount of traffic. Since the start of the year Bitcoin has soared around 19 times in value and has become the hottest investment amongst speculators.
The frenzy buying of Bitcon and its exceptional rise has come with warnings from financial institutions. A researcher at NLI Research institute in Tokyo, Makoto Sauma said that with the launch of bitcoin futures on the two biggest exchanges it has become easier for people to trade bitcoins.
On Tuesday warnings against investment in cryptocurrencies came from the Central Bank in Singapore. Saying that there is a risk of a sharp fall in prices, as the prices are driven by speculation.
Bitcoin is slightly bigger than Visa Inc. with a market capitalisation of around $275 billion and given that the actual number of transactions are small, financial professionals are warning that it is in a typical bubble.
In South Korea the Financial Supervisory Service said that cryptocurrencies, including Bitcoin is not considered as a currency. Whilst in Japan, Taro Aso, the Japanese Finance Minister said that cryptocurrencies is not a credible currency. An estimated 30 to 50 percent of worldwide bitcoin trade comes from Japanese retail investors.
A guru Japanese day trader, known as Cis who has a large following on twitter, tweeted that he had sold his 21 billion yen in cryptocurrencies which could have been the cause of the movement in Bitcoin, given his large following.
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