- Bitcoin fell more than 8% on Friday as speculators withdrew.
- The decline is likely due to profit taking and algorithmic trading, according to an expert.
- Bitcoin has gone from $ 5,000 to more than $ 8,000 this month, but is still trading well below the peak of $ 19,000 in December 2017.
- Watch the live bitcoin trade.
Bitcoin fell more than 8 percent to less than $ 7,200 on Friday as investors cashed in after the sharp rise in cryptocurrency this year. Prices for other cryptographic currencies, such as the Ethereum and Litecoin, fell by the same amount, while those in Bitcoins fell by around 12%.
The latest fall in cryptocurrency probably reflected profit-taking and algorithmic trading exacerbating the decline, said Jehan Chu, co-founder of Kenetic Capital, in an interview with CNBC. According to the data of CoinMarketCap, the total market capitalization of the cryptocurrency sector has decreased by about 9%, to about 225 billion dollars.
The price of bitcoin had climbed to nearly $ 8,200 earlier this week, which has more than doubled its value since the beginning of the year. There are several theories about the causes of the spike, including the trade war between the United States and China, growing institutional interest, an exodus of risky "spares", legal action against the owners of the Bitfinex stock exchange, and the hacking of the Binance stock exchange.
Given the sharp rise in Bitcoin, "it is not surprising that we have seen a slight adjustment," said Marcus Swanepoel, CEO of Luno, a cryptocurrency company. "The data will almost certainly show that a number of people who bought when the last major price hike will now leave at a price that covers their initial investment."
Bitcoins are still trading more than 40% above their $ 5,000 level in early May. However, it remains well below the peak of $ 19,000 reached in December 2017.