Bitcoin was heading toward a year-on-year loss on Wednesday, its 10th birthday, the first loss since last year’s bull market, when the original and biggest digital coin muscled its way to worldwide attention with months of frenzied buying.
By 1300 GMT, bitcoin was trading at US$6,263 on the BitStamp exchange, leaving investors who had bought it on Halloween 2017 facing yearly losses of nearly 3 per cent.
A year ago, bitcoin closed at US$6,443.22 as it tore toward a record high of near US$20,000, hit in December.
That run, fueled by frenzied buying by retail investors from South Korea to the United States, pushed bitcoin to calendar-year gains of over 1,300 per cent.
Ten years ago, Satoshi Nakamoto, bitcoin’s still-unidentified founder, released a white paper detailing the need for an online currency that could be used for payments without the involvement of a third party, such as a bank.
Traders and market participants said the Halloween milestone was inevitable, given losses of around 70 per cent from bitcoin’s peak and the continuing but incomplete shift toward investment by mainstream financial firms.
“The value mechanisms of crypto and bitcoin today are based more on underlying tech than hype and FOMO (fear of missing out),” said Josh Bramley, head trader at crypto wealth management firm Blockstars.
Growing use of blockchain – the distributed ledger technology that underpins bitcoin – is now powering valuations of the digital currency, he said, cautioning that some expectations for widespread use have not yet materialised.
Others said improvements to infrastructure such as custody services may allow mainstream investors who are wary of buying bitcoin to take positions.
“We see behind closed doors financial and non-financial institutions beavering away to create the infrastructure,” said Ben Sebley, head of brokerage at NKB Group, a blockchain advisory and investment firm.
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