Bitcoin value soars then falls back
NEW YORK (AP) — The price of bitcoin swung wildly Thursday, rising to more than $19,000 only to fall sharply within minutes, as both the euphoria and anxiety surrounding the virtual currency escalated just days before it starts trading on a major U.S. exchange.
At 3:25 p.m. EST, bitcoin was valued at $15,930, according to Coinbase, after briefly surging above $19,000 Thursday morning. At the start of the year, one bitcoin was worth less than $1,000.
The swings in price occurred as the trading community prepares for bitcoin to start trading on two established U.S. exchanges. Futures for bitcoin will start trading on the Chicago Board Options Exchange on Sunday evening and on the Chicago Mercantile Exchange a week later.
Yet the onset of futures trading has parts of Wall Street concerned. A group of banks came out and complained that federal regulators approved the futures, which begin trading on Sunday, too quickly and without properly considering the risks inherent in bitcoin.
The futures signal more mainstream acceptance of the currency, but also open up bitcoin to additional market forces. Futures allow for the shorting of bitcoin — that is betting that the price of bitcoin will go down — which presently is very difficult to near impossible to do.