The price of Bitcoin surged more than 8 percent Tuesday after plunging nearly 12 percent the day before, leaving analysts wondering if the virtual currency has ended its recent long-term decline or if more volatility is ahead.
Bitcoin dropped on Monday to $435.60 from $492.95, before springing back to $470.99 Tuesday morning, according to the virtual currency website CoinDesk.
Bitcoin’s price is known to surge and fall quickly, but lately the currency seems to have slumped.
Last week, Bitcoin fell to its lowest level since May. The price floated around $600 in June and hadn’t fallen below $500 since May, according to CoinDesk. Last year, Bitcoin peaked at about $1,150.
The price briefly hit $309 Monday on an exchange called BTC-e but quickly recovered, a collapse and rebound some in the industry are calling a “flash crash.”
The steadily falling price this month follows a period of relative stability since February and comes as government agencies seek to regulate the currency.
In July, New York became the first state to propose regulations of virtual currency companies. The proposed regulations would require licenses for companies that secure, store or maintain custody of the virtual currency for customers. And last week, the federal Consumer Financial Protection Bureau warned that virtual currencies like Bitcoin are like the “Wild West,” not backed by any government or central bank.
Although Bitcoin has gained popularity among investors and entrepreneurs since its introduction in 2009, consumers have been more hesitant to adopt the currency, likely due to its unpredictable price.