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Bitcoin plunges more than $3,000 after hitting new record

Bitcoin has given investors whiplash yet again.Just after hitting a new record of more than $17,000, the digit...

Posted: Dec 8, 2017 5:25 PM
Updated: Dec 8, 2017 5:25 PM

Bitcoin has given investors whiplash yet again.

Just after hitting a new record of more than $17,000, the digital currency plummeted Friday. Its price nosedived more than $3,000, swinging wildly between a high of $17,154 and a low of $13,964, according to tracking site CoinDesk.

Bitcoin has been on a wild ride this year. Its price has soared from less than $1,000 in January -- but with occasional sudden drops along the way.

Trading has become especially frenzied in recent weeks as new investors have dived into the volatile market. Before Friday's fall, it had gained roughly $5,000 in the previous 48 hours.

Related: I bought $250 in bitcoin. Here's what I learned

Arthur Hayes, CEO of Hong Kong-based bitcoin exchange Bitmex, said he thought the sharp correction Friday was "healthy" given that the digital currency's price had jumped about 80% the past week.

He predicted more sharp moves early next week when the Chicago Board Options Exchange starts allowing investors to trade bitcoin futures.

By Friday evening in Hong Kong, bitcoin was trading at around $15,000.

Bitcoin's extraordinary boom has raised a host of questions. Here are some of the major issues:

How do you buy bitcoin?

One of our reporters used his experience of buying $250 of bitcoin recently to explore what on earth is going on with the digital currency right now.

Related: I bought $250 in bitcoin. Here's what I learned

"It's an investing frenzy, plain and simple," he wrote.

Is it safe?

The online exchanges where many people trade bitcoin and other digital currencies have a checkered history.

Bitcoin: More than $70 million stolen in bitcoin hack

Some have gone bust altogether and others have suffered cyber heists in which hackers have made off with huge sums. The latest example is digital currency site NiceHash, where bitcoins worth more than $70 million were stolen this week.

What does Wall Street make of it?

One factor driving bitcoin's price higher and higher in recent weeks is the expectation that big financial players like hedge funds and asset managers are set to wade into the market. That's been supported by established exchanges in the U.S. saying they're planning to let investors trade bitcoin futures soon.

Related: Big banks say bitcoin futures could be dangerous

But big banks -- who have a complicated relationship with digital currencies -- have issued a warning about the dangers of bitcoin futures, saying the risks haven't been properly studied.

What does the future hold?

An environmental crisis is looming if bitcoin continues on its current trajectory, some experts say. The complex computer algorithms that underpin bitcoin require huge data centers that guzzle power.

Related: Bitcoin boom may be a disaster for the environment

One observer predicts that without a significant change in how transactions are processed, bitcoin could be consuming enough electricity to power the U.S. by the middle of 2019. Six months later, that demand could equal the entire world's power consumption.

-- Daniel Shane contributed to this report.

Minnesota Coronavirus Cases

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Cases: 485655

Reported Deaths: 6558
CountyCasesDeaths
Hennepin1007641586
Ramsey43106801
Dakota36297390
Anoka33293385
Washington22078256
Stearns18734201
St. Louis14805262
Scott13290107
Wright12526115
Olmsted1178988
Sherburne872872
Carver772640
Clay691587
Rice670491
Blue Earth594735
Kandiyohi579574
Crow Wing520681
Chisago499045
Otter Tail482170
Benton446490
Winona418349
Mower404731
Douglas392668
Nobles387047
Goodhue385768
Polk343162
McLeod339349
Beltrami337951
Morrison324547
Itasca313046
Lyon313044
Becker311342
Isanti306154
Steele300411
Carlton300149
Pine282016
Freeborn280723
Nicollet258641
Todd248030
Brown245037
Le Sueur235320
Mille Lacs227447
Cass220024
Waseca208717
Meeker207434
Martin189528
Wabasha18653
Roseau180217
Hubbard160640
Houston157314
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Pennington134416
Wadena130920
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Aitkin118833
Sibley117310
Watonwan11738
Rock115714
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Pipestone101424
Yellow Medicine97617
Murray9448
Jackson93510
Swift87918
Pope8045
Marshall77815
Stevens7418
Lake74018
Clearwater71914
Lac qui Parle68416
Wilkin67110
Koochiching61811
Big Stone5163
Lincoln5062
Grant4918
Norman4788
Unassigned46768
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Kittson40921
Red Lake3625
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Cook1180

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Cases: 362827

Reported Deaths: 5440
CountyCasesDeaths
Polk58260551
Linn20670313
Scott18318210
Black Hawk16258292
Woodbury14979211
Johnson1384874
Dubuque13562194
Dallas1138690
Pottawattamie10791143
Story1024945
Warren556674
Clinton543784
Cerro Gordo533782
Webster519587
Marshall497272
Sioux494869
Buena Vista474537
Des Moines458861
Muscatine452291
Wapello4345108
Jasper417766
Plymouth395378
Lee375452
Marion359169
Jones294154
Henry293337
Carroll286249
Bremer280854
Crawford275135
Boone259730
Washington254347
Benton253854
Mahaska224746
Jackson221638
Dickinson217840
Tama213765
Kossuth208555
Clay193625
Hamilton192142
Delaware189140
Winneshiek189127
Buchanan185729
Fayette185235
Page183319
Hardin181439
Wright179931
Harrison179469
Cedar178523
Clayton168154
Butler167231
Mills163020
Floyd162741
Cherokee154836
Madison154718
Poweshiek154330
Hancock147130
Allamakee146747
Lyon145941
Iowa145023
Appanoose139247
Grundy139230
Jefferson138734
Winnebago138631
Cass134751
Calhoun133811
Mitchell130940
Louisa128241
Union126631
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Sac124618
Emmet121740
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Franklin118319
Humboldt117925
Guthrie116628
Palo Alto105221
Montgomery104136
Howard102921
Clarke100420
Unassigned9900
Keokuk98229
Monroe93328
Adair92128
Ida91432
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Davis83123
Monona81627
Greene77510
Lucas74021
Osceola70615
Worth6997
Taylor66612
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Decatur5829
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