Crypto boom shaken as Bitcoin plunges along with other coins

Even with the retreat, Bitcoin has more than doubled this year and until recently was knocking on the door of the record high of $19,511 set in 2017.

Bitcoin and other digital currencies plunged Thursday, a slide likely to stoke speculation about the durability of the boom in cryptocurrencies.

A representation of virtual currency Bitcoin is seen in this illustration taken November 19, 2020. (Reuters File Photo)

Bitcoin slumped as much as 8.7%, the most since early August, while other digital coins like Ether posted double-digit percentage declines. The Bloomberg Galaxy Crypto Index at one point slid more than 6%.

“Conditions are very massively overbought and bound for a correction,” said Vijay Ayyar, head of business development with crypto exchange Luno. “So I don’t think it’s unusual frankly. I still believe we’ll see all-time highs before a larger drop/correction.”

Even with the retreat, Bitcoin has more than doubled this year and until recently was knocking on the door of the record high of $19,511 set in 2017. Crypto believers tout purchases by retail investors, institutions and even billionaires, as well as the search for a hedge against dollar weakness, as reasons why the boom can last.

Skeptics argue that the cryptocurrency’s famed volatility portends a repeat of what happened three years ago, when boom turned to epic bust.