Bitcoin ends dramatic week with 20% slump followed by recovery

Bitcoin rounded off a week of frenzied investor speculation with a day of whipsaw trading that knocked nearly 20% off its value at one point, but still left the cryptocurrency changing hands at more than $15,000 (£11,000).

The currency, which was likened to Dante’s Inferno by one senior banker this week, rocketed to a new high of $16,660 overnight before slumping to $13,482 by midday on Friday. As the London markets were closing, bitcoin had recovered some of its losses to trade at $15,350 – having started the week at $10,875 and the year at $966.

Bitcoin investors are used to wild fluctuations in its value, with sudden drops immediately followed by a return to its long-term upward trajectory. The cryptocurrency has jumped 40% this week, drawing comparisons with the 17th-century tulip bubble.

There were fresh warnings about the virtual currency on Friday. Jamie Dimon, chief executive of US bank JP Morgan, told broadcaster CNBC: “Everyone has a personal opinion about bitcoin. I remain highly sceptical of it. But as I’ve said previously, I’m open-minded to uses of cryptocurrencies if properly controlled and regulated.”

His remarks follow those of Sir Howard Davies, chairman of Royal Bank of Scotland, who painted an apocalyptic picture for bitcoin. “Put up the sign from Dante’s Inferno – ‘Abandon hope all ye who enter here’ – I think that’s probably what’s needed,” Davies said.

Nobel-prize-winning economist Joseph Stiglitz has previously argued that the currency should be outlawed.