The value of bitcoin fell sharply Monday, not long after the cryptocurrency crossed the $5,000 mark on Friday. At one point, the price dipped below $4,400 in value, representing a drop of around 12% since the Friday evening high.
Ethereum, meanwhile, traded Monday morning at around $312, down around 20% from the $391 it commanded Friday. And Litecoin, another virtual currency that recently hit headlines due to its strong performance, was down around 23% over the same period.
Quoted by Coindesk, cryptocurrency analyst Ronnie Moas of Standpoint Research suggested that large traders had deliberately started dumping bitcoins in order to depress the price and then buy more of them.
Either way, this correction has to be viewed in the context of bitcoin’s rapid appreciation in value during 2017. At the start of this year, bitcoin was around the $1,000 mark.
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The bitcoin ecosystem continues to attract significant investment. On Monday, Bloomberg reported that Sequoia Capital and IDG Capital were putting money into China’s Bitmain Technologies, which makes equipment for bitcoin miners and conducts its own mining of the cryptocurrency.
Bitcoin miners are essential hardcore data-processing operations that race one another to verify parts of the bitcoin blockchain, which is the currency’s distributed ledger of transactions. Whichever mining operation completes a block first gets fresh bitcoins as its reward.