On Wednesday the Bitcoin price not only surpassed the US$10,000 mark as many had predicted, but continued its ascent and broke through US$11,000 during a stunning day of trade.
The drama, however, did not stop there. Not long after it reached US$11,000 the cryptocurrency sank all the way down to US$9,009. An incredible 18% reversal in a matter of hours.
Since then it has recovered some of these declines and sits on the right side of US$10,000 again.
Why did the Bitcoin price crash?
The Bitcoin price started to slide overnight following a market outage in the United States.
According to Bloomberg, a massive spike in exchange traffic led to outages, leaving traders unable to buy or sell the cryptocurrency.
One leading exchange, Coinbase, stated that traffic on its platform hit an all-time high and was eight times the peak demand it experienced back in June.
The confusion appears to have led to panic selling from a lot of traders.
Should you buy Bitcoin?
While I think Bitcoin has a strong chance of continuing its rise in 2018 despite talk of it being a bubble, I believe this latest volatility highlights just how high risk an investment it can be.
In light of this, I would suggest that investors restrict an investment to just a very small part of their portfolio.
Or alternatively, consider one of the many exciting tech shares on the local market such as Appen Ltd (ASX: APX), Xero Limited (ASX: XRO), or even Aristocrat Leisure Limited (ASX: ALL).
