Bitcoin price crash sees cryptocurrency market plunge against the dollar

and other key cryptocurrencies, such as ethereum took a pounding on October 11 as billions of pounds were wiped off their value in minutes.

The market had been relatively stable recently.

Bitcoin and other cryptocurrencies took a battering today

How much did the currencies lose?

Bitcoin lost over 5 percent of its value on Thursday morning, crashing below $6,300 (£4,700), equating to around a $13billion (£9.8billion) loss.

The decentralised digital commodity’s price fell sharply to $6,125 (£4,629) but it did recover briefly to $6,200 (£4,686).

The plummet means Bitcoin is currently trading close to its 2018 low, having hit $5,800 (£4,300) in July.

Ethereum and ripple suffered even worse, dropping by between 10 and 12 percent.

Since January 2018, more than $600billion (£453 billion) has been wiped off the value of cyptocurrencies.

What is Bitcoin?

Bitcoin got you baffled? Here’s what you need to know:

  • Bitcoin is a virtual currency
  • It’s traded between people without the help of a bank
  • Every transaction is recorded in a public ledger, or ‘blockchain’
  • Bitcoin is created by mining
  • Mining involves solving difficult maths problems using computer processors
  • Bitcoin can be traded anonymously, which makes it a popular way of funding illegal activities
  • A single Bitcoin is worth just under £5,000 today, but the value fluctuates wildly
  • Bitcoin is one of many different cryptocurrencies, but by far the most popular

Why did the cryptocurrency market ?

It’s not clear exactly what has caused today’s crash, although the recent falling price could be down to a fall in trading volumes since a high late last year.

Short sudden changes in bitcoin prices can also be attributed to trading bots initiating a buy or sell that then triggers others to do the same, creating a domino effect.

Gary McFarlane, a cryptocurrency expert at investment platform, Interactive Investor, explained: “The crypto markets are hugely volatile; on the one hand because they are a new and immature market dominated by individual investors, and on the other hand because it is a new technology the worth of which is hard to assess.”

Shortly after the initial bitcoin price nose-dive, it did somewhat recover clawing back some of its lost ground.

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