Bitcoin plunge below US$30,000 has newbies scrambling to google double-spend for answers

Bitcoin drops, extending an almost 11 per cent plunge on Thursday as traders search for answers to volatile prices

Other cryptocurrencies also sold off on Thursday, with the Bloomberg Galaxy Crypto Index losing as much as 10 per cent

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Bitcoin has seen a stellar rally as prices more than doubled after passing US$20,000 for the first time in December, surpassing US$30,000 in early January before peaking at about US$42,000. Photo: Shutterstock

Published: 12:09pm, 22 Jan 2021Updated: 12:09pm, 22 Jan 2021

Bitcoin dropped, extending a plunge from record highs and sparking a hunt for reasons the notoriously volatile asset was selling off. One that captured attention questioned the very viability of the token itself, though it turned out not to be cause for concern.

The world’s largest cryptocurrency fell to as low as US$29,327 as of 8.29am in Hong Kong on Friday, after a slide of almost 11 per cent a day earlier. Commentators have cautioned that a sustained drop below US$30,000 could presage further losses in the wake of last year’s 300 per cent surge.

“This level looks very vulnerable and a break below it is bad news in the near-term for Bitcoin and cryptocurrencies in General,” Craig Erlam, senior market analyst at Oanda Europe, wrote in a note Thursday. “I wouldn’t be surprised to see a test of US$20,000 before too long.”

A trade blog suggested that there had been what’s known as a double-spend, where the same token is used by the same person in two transactions. It’s like if someone bought a car, paid the seller, drove off with their brand new wheels and then later yanked back all the money. In the case of the blockchain, or the software that underlies Bitcoin and other cryptocurrencies, the transaction in question would be excluded from the final tally on the digital ledger.

But, “in this case, it does not look like a merchant was defrauded,” said Nic Carter, co-founder of Coin Metrics, a data firm. “This does not look sinister to me. My best guess is this is experimentation or a software bug.”

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