Has the bitcoin fever broken?
Bitcoin prices plunged sharply to below $11,000 on Friday, shedding a third of its value in just 24 hours, according to data from CoinDesk.com. It later rebounded slightly to around $12,000 -- but that's still a stunning 25% less valuable than bitcoin was Thursday morning.
Prices had approached $20,000 as recently as Sunday.
The price drop comes on the back of a few days of bad news for bitcoin, which has still soared by more than 1,000% since the start of the year.
On Thursday, a bitcoin spinoff called bitcoin cash was suspended from one of the most popular exchanges after possible insider trading.
Related: What is bitcoin?
Meanwhile, the U.S.'s markets regulator halted trading in a red-hot bitcoin stock.
Earlier in the week, a South Korea-based virtual currency exchange was forced to close its doors after falling victim to two attacks by hackers in the space of a few months.
The incidents have raised questions about the reliability of cryptocurrency markets, which aren't regulated by governments or central banks.
But some argue bitcoin is just taking a breather -- albeit a big one -- after a furious 2017.
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"A correction like we are witnessing today is hardly surprising," said Dave Chapman, managing director of Hong Kong cryptocurrency trading platform Octagon Strategy.
Amid the turbulence Friday, one of the most popular cryptocurrency exchanges, Coinbase, said buys and sells might be "temporarily offline" due to high traffic.
The plunge threatens to take the shine off what's been an incredible year for bitcoin. This time last year the virtual currency was worth less than $1,000.
The rally has been driven partly by the expectation that more and more mainstream investors will begin trading it.
Earlier in December, two major U.S. financial exchanges launched trading in bitcoin futures, which will help give it more clout with big, institutional investors.
Related: Looking to sell bitcoin? It's complicated
Bitcoin's dizzying ascent has prompted a number of high-profile figures in finance and economics to sound the alarm, cautioning that the currency's boom is simply a huge bubble.
Among them are outgoing Federal Reserve Chairwoman Janet Yellen, who described virtual currencies as "highly speculative."
However, Shane Chanel, an adviser at Australian investment firm ASR Wealth Advisers, thinks investors could start shifting their focus to virtual currencies other than bitcoin over the coming months.
"I feel the cryptocurrency madness is only beginning," he said.
CNNMoney's Jackie Wattles contributed to this report.
Bitcoin is booming and so are criminal schemes looking to make money off the trend.
The hype around cryptocurrency is only growing, fueled by the massive rise of bitcoin, the digital currency created in 2009. Its value has skyrocketed by thousands of dollars in the last year, but the price fluctuates regularly.
As the hype grows, so does interest in acquiring digital currency -- both from the general public who might not know much about the technology and hackers who want to profit off it.
"Whenever something gets this much publicity and popularity and there's a potential to make what appears to be free and easy money, the criminal aspects of the world are going to take advantage of it," said Mike Murray, vice president of security intelligence at mobile security firm Lookout.
In order to use bitcoin, you need a digital wallet to receive, send, and store cryptocurrencies. By creating fake wallets, hackers can take advantage of people new to bitcoin and other digital currencies who might not realize the difference between legitimate companies and fake apps.
Lookout recently discovered three fake bitcoin wallet Android apps in the Google Play Store that trick people into sending cybercriminals bitcoin. Some of the apps had thousands of downloads.
Google has since pulled them from the store.
Related: Bitcoin boom may be a disaster for the environment
"They were clearly targeted at people who don't know anything about bitcoin, went on the Google Play Store, and started installing bitcoin stuff on their phone," Murray said.
In addition to fake apps, cybercriminals are creating malware that uses people's computers to generate cryptocurrencies in a process called "mining."
By hijacking a stranger's computer or phone, a hacker puts the work on those devices -- a typically costly and complicated process. Mining requires a lot of computing power to solve complicated math problems, verify transaction records and ultimately receive digital coins.
It's no longer feasible to mine bitcoin with personal computers, but you can do so for other currencies like Monero and Ethereum. Candid Wueest, principal threat researcher for security firm Symantec, said the explosive popularity of bitcoin is further sparking interest in other currencies, and malware creators are exploiting tools to mine them.
According to a report from Symantec, malicious mining activity is on the rise. A hacker can hide malicious code on a website and the site's users become digital currency miners without realizing it.
It can be a lucrative scheme. This week, hackers targeted websites using the Wordpress content management system to infect them with Monero mining malware. The attackers reportedly made at least $100,000.
Digital currency exchanges are also a popular target for hackers. On Wednesday, hackers compromised EtherDelta, a place for buying cryptocurrencies. Meanwhile, South Korean bitcoin exchange Youbit said this week it was filing for bankruptcy after criminals stole almost one-fifth of its clients' holdings in the second major cyberattack on its systems this year.
Carles Lopez-Penalver, intelligence analyst at security firm Flashpoint, said phishing campaigns from hackers posing as cryptocurrency wallets, exchanges, or other websites try to trick people into forking over currency or personal information. Some of these campaigns appear as advertisements on search engines and websites, or in Slack chatrooms where people discuss digital currencies.
Malicious attacks targeting digital currencies and users are only going to get worse, he said.
"The will and drive to target cryptocurrency-oriented industry is here to stay because of the absurd money that has been pumped into it in the past couple of months," Lopez-Penalver said. "It is one of the most targeted industries right now -- it's what cybercriminals are looking for."
Bitcoin just dipped below $11,000. Where will it go next? 5 Hours Ago | 00:44
Bitcoin and several other major cryptocurrencies plunged Thursday evening New York time as the end of an exponential year of growth neared.
The slashing decline triggered temporary, built-in trading halts in the bitcoin futures traded on the CME and Cboe.
Bitcoin plunged more than 20 percent to a low of $12,504 according to CoinDesk, down more than $3,000 from $15,820 less than 12 hours ago. The digital currency recovered slightly to $13,545, as of 4:09 a.m., ET, but was still down almost 13 percent for the session.
Bitcoin 12-hour performance
Source: CoinDesk
CoinDesk's bitcoin price index tracks the price of bitcoin on Bitstamp, Coinbase, itBit and Bitfinex.
Despite the sharp drop, the decline took bitcoin only to roughly two-week lows. The digital currency is still up more than 1,300 percent this year.
The price of bitcoin is down more than 25 percent from an all-time high of nearly $20,000 reached this past weekend, market data shows.
Prices fell to as low as $14,502 to start today's trading session, according to CoinDesk's Bitcoin Price Index (BPI), about 27 percent from the all-time high of $19,783 reported on Dec. 17.
Overall, bitcoin has seen several notable price drops following Sunday's gains, including a dip below $17,000 on Tuesday that accounted for a roughly $1,800 drop on the day. Indeed, analysts have suggested that the price could experience continued volatility as 2017 comes to a close and new money, brought in by bitcoin's meteoric gains, exits for fiat.
But, others may be testing the waters in alternative cryptocurrencies, as bitcoin is far from alone in having seen its price recently hit an all-time high.
According to data from OnChainFX, which charts price developments for cryptocurrencies, all of the top-20 coins by market capitalization have seen an all-time high within the past four days. Of those, cryptocurrencies like bitcoin cash, dash and litecoin have since posted declines in the last 24 hours.
Dropping water image via CoinDesk archive
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.
