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Bitcoin holds gains as cryptocurrency watchers debate value
[ISTANBUL] Bitcoin rose for a second day Wednesday as it continued its recovery from a pre-Christmas slump.
The largest cryptocurrency fluctuated between gains and losses and traded 1.8 percent higher around US$16,211 at 8.50 am in London. Rival digital currencies extended their gains with ripple and ethereum trading 10 per cent and one per cent higher respectively, according to data compiled by Bloomberg.
The gains add to signs the biggest cryptocurrency may have found a floor after a 26 per cent slump through Tuesday. Its volatility has added to an ongoing debate about how to value the digital coin which has surged about 16,000 per cent this year.
"Nobody knows the ultimate value of this underlying asset," Edward Stringham, president of the American Institute for Economic Research, a Massachusetts-based research group, said on Bloomberg Television. "We cannot predict whether it's going to be zero or one million dollars or anything in between."
For skeptics doubting whether individuals and businesses will truly start using bitcoin as a medium of exchange - as opposed to some officially backed digital currency - the short-lived rebound from the past week's selloff portends further declines.
"It's much more likely once you've made a big downward movement like the one we made last week that you have a bigger and more complex correction," Ric Spooner, a Sydney-based analyst at CMC Markets, told Bloomberg Television. "Once a market like this one locks into those patterns it becomes pretty good" to follow via chart-based analysis, he said.
Mr Spooner said it's possible bitcoin could drop to US$5,700 or US$8,700 in coming months.