A warning about bitcoin’s wild price swings
The person atop one of cryptocurrency’s most popular exchanges pleaded with people to invest responsibly.
In a blog post on his site, Coinbase CEO Brian Armstrong sought to “remind customers of some of the risks associated with trading digital currency” — which include wild price swings.
The price of a single bitcoin soared this week from under $10,000 to more than $17,000 before slumping back down to around $15,000, according to data from CoinDesk, which values bitcoin based on data from four exchanges, including Coinbase.
On Coinbase’s exchange the price soared past $18,000 at one point.
Armstrong warned in his post on Thursday that the increased interest in cryptocurrencies, which was punctuated by a stunning bitcoin rally earlier this week, has led to “extreme volatility and stress on our systems.”
During the frenzy, Coinbase’s valuation was consistently higher than the CoinDesk index — at one point by a $2,000 margin. Even Saturday afternoon, Coinbase listed the price of a bitcoin around $15,000, while the CoinDesk hovered around $14,700.
Bitcoin’s rise is mind-boggling considering just one year ago it traded for less than $800. At one point in 2011, it traded for about three bucks, according to CoinDesk.
Its stunning ascent was driven in large part by increasing attention from mainstream investors. And bitcoin’s valuation has continued to balloon — with a few sharp dips — despite a smattering of warnings from top economists and business leaders.
Beginning Sunday, investors will be able to trade bitcoin futures via the Chicago Board Options Exchange. And they’ll debut on the Chicago Mercantile Exchange a week later.
–CNNMoney’s Jethro Mullen contributed to this report.