NEW YORK, Dec 23, (AP): What’s a bitcoin worth? Lately nobody knows for sure, but after a wild ride on Friday, it’s worth a good deal less than it was Thursday. After losses over the last few days, the digital currency fell as much as 30 percent overnight in Asia, and the action became so frenzied that the website Coinbase suspended trading.
It later made up much of that ground, and slumped 9.5 percent to $14,042 Friday, according to the tracking site CoinDesk. Experts are warning that bitcoin is a bubble about to burst, but things might get crazier before it does: A lot of people have heard of bitcoin by now, but very few people own it. “Bubbles burst when the last buyers are in,” said Brett Ewing, chief market strategist for First Franklin. “Who are the last buyers? The general public, unfortunately.” Ewing said 40 percent of bitcoin belongs to just 1,000 people, and hedge funds and other major investors are going to start buying it soon. But those funds may buy bitcoin and also protect themselves by placing bets that it will fall. Retail investors may just buy it only to see it fall. “I think investors should approach it with caution and I think many people will dive into it not understanding what it is,” he said. As bitcoin skyrocketed this month, the volume of trading was unprecedented as investors hoping to catch a ride up piled in. Prices have risen so fast, the Friday returned the price of bitcoin only to where it was trading two weeks ago.
The volatility has created a circuslike atmosphere. Some companies that have added the word “bitcoin” or related terms to their names to get in on the action. The craziest thing is, it’s worked. Long Island Iced Tea Corp. until this week had been known for its peach-, raspberry-, guava-, lemonand mango-flavored drinks. Then, on Thursday, the company announced a radical rebranding. It’s changing its name to Long Blockchain Corp., shifting its primary focus from iced tea to “the exploration of and investment in opportunities that leverage the benefits of blockchain technology.” Blockchain is a ledger where transactions of digital currencies, like bitcoin, are recorded.