On Wednesday the Bitcoin (BTC) price continued its remarkable run and reached a six-week high of US$9,730 per coin according to Coin Market Cap.
This put the world’s largest cryptocurrency within sight of the symbolic US$10,000 mark.
But unfortunately since hitting that peak it has been nothing but down for the Bitcoin price.
At the time of writing on Thursday afternoon the BTC price stands at US$8,876 per coin, almost 9% lower than its peak on Wednesday.
Why is the Bitcoin price sinking lower?
In my opinion there are two potential catalysts for today’s decline. One is good old-fashioned profit taking.
Which wouldn’t at all be surprising considering the cryptocurrency had risen an incredible 39% in April when it peaked at US$9,730.
Another potential catalyst could be comments from the former CEO of Paypal and Intuit, Bill Harris.
On Wednesday he told ReCode that Bitcoin was “the greatest scam in history” and dismissed its use as a means of payment and store of value due to the wild swings in its price.
I think that Harris makes some fair points. While I do believe cryptocurrencies have the potential to move into the mainstream, there is no way they will be able to achieve this when their prices are so volatile. But it is still early days in the world of cryptocurrencies, of course, and things may become calmer as the market matures.
How are the alt coins holding up?
It isn’t just Bitcoin sinking lower today, unfortunately. Alt coin peers such as Ethereum (ETH), Ripple (XRP), Litecoin (LTC), and Cardano (ADA) are all down by no less than 7% since this time yesterday.
There have been a couple of exceptions, however. The Bitcoin Cash (BCH) price and the EOS (EOS) price have defied the market sell off and are up 1.5% and 2%, respectively, over the last 24 hours.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.