Bitcoin tumble wipes $38bn off value of cryptocurrency

Bitcoin has suffered a dramatic slump as the cancellation of a technology upgrade prompted some users to switch out of the cryptocurrency, spooking speculators who had profited from a more than 500 per cent surge this year.

As of Monday morning, the value of the cryptocurrency had dropped 5.6 per cent since late Friday, and at one point extended its slide from last week’s record to as much as 29 per cent. Bitcoin cash, a rival that split from the original bitcoin in August, has jumped 32 per cent since Friday, according to data compiled by Coinmarketcap.com.

Bitcoin cash is gaining popularity because of its larger block size, a characteristic that makes transactions cheaper and faster than the original. When a faction of the cryptocurrency community cancelled plans to increase bitcoin’s block size on Wednesday – a move that would have created another offshoot – some supporters of bigger blocks rallied around bitcoin cash.

The resulting volatility has been extreme even by bitcoin’s wild standards and comes amid growing interest in cryptocurrencies among regulators, banks and fund managers. While sceptics have called bitcoin’s rapid advance a bubble, it has become too big for many on Wall Street to ignore. Even after shrinking by as much as $38bn (£29bn) since Wednesday, bitcoin boasts a market value of $105bn.

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