Just hours after rallying past $11,000, bitcoin plunged as much as 20%.
The plunge marked a wild day for the digital currency that saw intermittent outages on exchanges, the price dropping below $9,000 and then ending the day back above $10,000.
After the price hit a high of over $11,400, heavy selling quickly followed after reports of service outages and delays on major bitcoin exchanges, with those exchanges citing massive spikes in traffic.
Bitcoin had rallied over 20% in four days, surging past $10,000 Tuesday before reaching $11,000 less than 24 hours later. The run-up came with warnings of a massive bubble, even from Wall Street’s biggest bitcoin bulls.
“This is a bubble and there is a lot of froth. This is going to be the biggest bubble of our lifetimes,” said Mike Novogratz, founder of a new $500 million fund to invest in cryptocurrencies.
But exchange outages have happened before and led to similar sell-offs. Coinbase, one of the biggest bitcoin trading platforms, tweeted that traffic was at an all-time high after surging past $11,000 Wednesday morning.
“After doubling in such a short period of time, people are taking profits,” said David Mondrus, chief executive of Thrive, a blockchain-based research platform. “Issues in the exchanges add to it without a doubt. When you have a lack of ability to exit, then people dump in order to exit faster.”