Bitcoin slides by over $1,000 in less than 48 hours

Bitcoin (virtual currency) coins placed on Dollar banknotes are seen in this illustration picture on November 6, 2017. (REUTERS/Dado Ruvic/Illustration)
Updated 10 November 2017
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Bitcoin slides by over $1,000 in less than 48 hours

LONDON: Bitcoin dropped below $7,000 on Friday to trade more than $1,000 down from an all-time high hit on Wednesday, as some traders dumped it for a clone called Bitcoin Cash, sending its value up around a third.
Bitcoin has been on a tear in recent months, with a vertiginous sevenfold increase in value since the start of the year that has led to many warnings the bitcoin market — now worth well over $100 billion — has become a bubble that is about to burst.
It reached a record high of $7,888 around 1800 GMT on Wednesday after a software upgrade planned for next week that could have split the cryptocurrency in a so-called “fork” was suspended.
But it has quickly retreated from that peak, falling to as low as $6,718 around 1330 GMT on Friday. It later recovered a touch to trade around $6,880 by 1645 GMT, but that was still down almost 4 percent on the day.
“Bitcoin is all ups and downs,” said Thomas Bertani, chief executive of Eidoo, a cryptocurrency wallet provider that recently became the first startup in the space to take out a full-page advert in the Wall Street Journal newspaper.
“The market realized that the price rise was an over-reaching, so people started selling... (and) there are many long and short positions that amplify price movements.”
As bitcoin tumbled, Bitcoin Cash, which was generated from another software split on Aug.1, surged, trading up as much as 35 percent on the day to around $850, according to industry website Coinmarketcap.
Bitcoin Cash’s transactions are processed in so-called “blocks” that are larger in capacity than bitcoin’s, so can therefore in theory allow for more transactions to be processed at any given time, making transaction fees much cheaper.
The fork that had been planned for next week, known as “SegWit2x,” had also intended to increase the capacity of the blocks, and could thus have reduced fees for bitcoin transactions.
Any investors, therefore, that see bitcoin more as a currency than a store of value might be choosing to buy into Bitcoin Cash now that Segwit2x had been scrapped, Bertani said.
“People who had been supporting Segwit2x could as an alternative move to Bitcoin Cash,” he said.
“There are good reasons to believe that Bitcoin Cash could be an alternative for people who believe that low fees on bitcoin transactions are needed today.”


Oil jumps as market tightens, more gains seen

Updated 55 min 13 sec ago
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Oil jumps as market tightens, more gains seen

  • Benchmark Brent crude hit its highest since November 2014 at $80.94 per barrel
  • Commodity traders Trafigura and Mercuria said that Brent could rise to $90 per barrel by Christmas
LONDON: Oil prices jumped more than 2 percent to a four-year high on Monday after OPEC declined to announce an immediate increase in production despite calls by US President Donald Trump for action to raise global supply.
Benchmark Brent crude hit its highest since November 2014 at $80.94 per barrel, up $2.14 or 2.7 percent, before easing back to around $80.65 by 1000 GMT. US light crude was $1.25 higher at $72.03.
“This is the oil market’s response to the OPEC+ group’s refusal to step up its oil production,” said Carsten Fritsch, commodities analyst at Commerzbank in Frankfurt.
OPEC leader Saudi Arabia and its biggest oil-producer ally outside the group, Russia, on Sunday ruled out any immediate extra increase in output, effectively rebuffing a call by Trump for action to cool the market.
“I do not influence prices,” Saudi Energy Minister Khalid Al-Falih told reporters as OPEC and non-OPEC energy ministers gathered in Algiers for a meeting that ended with no formal recommendation for any additional supply boost.
Trump said last week that OPEC “must get prices down now!” but Iranian Oil Minister Bijan Zanganeh said on Monday OPEC had not responded positively to Trump’s demands.
“It is now increasingly evident, that in the face of producers reluctant to raise output, the market will be confronted with supply gaps in the next 3-6 months that it will need to resolve through higher oil prices,” BNP Paribas oil strategist Harry Tchilinguirian told Reuters Global Oil Forum.
Commodity traders Trafigura and Mercuria said on Monday that Brent could rise to $90 per barrel by Christmas and pass $100 in early 2019, as markets tighten once US sanctions against Iran are fully implemented from November.
J.P. Morgan said US sanctions on Iran could lead to a loss of 1.5 million bpd, while Mercuria warned that as much as 2 million bpd could be knocked out of the market.
The Organization of the Petroleum Exporting Countries as well as top producer Russia has been discussing raising output to counter falling supply from Iran, although no decision has been made public yet.
A source familiar with OPEC discussions told Reuters on Friday that OPEC and other producers have been discussing the possibility of raising output by 500,000 bpd.
“We expect that those OPEC countries with available spare capacity, led by Saudi Arabia, will increase output but not completely offset the drop in Iranian barrels,” said Edward Bell, commodity analyst at Emirates NBD bank.
US commercial crude oil inventories are at their lowest since early 2015 and although US oil production is near a record high of 11 million barrels per day (bpd), subdued US drilling activity points toward a slowdown in output.