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Bitcoin value drops

The bitcoin fell below $15,000 after the cryptocurrency’s biggest rally in two weeks ended a rout that wiped more than $9,000 off the price.

Cryptocurrencies including the bitcoin have become a subject of controversy in Nigeria and the Central Bank of Nigeria has said it is studying the situation.

The largest digital coin dropped 6.5 per cent to $14,874 at 11:44 a.m.in New York on Wednesday, having earlier climbed as much as 3.6 per cent.

Among rival digital currencies, ripple rose by eight per cent, while ethereum and litecoin fell, according to data compiled by Bloomberg.

The relatively quiet day for bitcoin came on the heels of a five-day slump that reached 44 per cent at its depths and took the coin below $11,000 on Friday.

Just four days earlier, it rose within striking distance of $20,000 after a torrid advance that started in early December.

Investors continued to snap up shares in companies often seen as a safer alternative to investing directly in cryptocurrency itself.

Digital Power rose in early trading after saying it was boosting its computing infrastructure to mine digital coins. On Track Innovation also advanced.

Bitcoin futures on the CME Group exchange slipped by 3.6 per cent.

Bitcoin’s volatility is adding to an ongoing debate about how to value the digital coin which has surged about 1,600 per cent this year.

“Nobody knows the ultimate value of this underlying asset,” the President of the American Institute for Economic Research, a Massachusetts-based research group, Edward Stringham, said on Bloomberg Television.

“We cannot predict whether it’s going to be zero or $1m 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,” a Sydney-based analyst at CMC Markets, Ric Spooner, 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.

Spooner said it was possible bitcoin could drop to $5,700 or $8,700 in coming months.