Bitcoin (BTC) had a rocky Sunday session, with its price gyrating within a tight range. Having opened the session at $6,545.53, the digital coin hit an intraday high of $6,589.11 in late morning trading, before retreating to lower levels. The coin made another attempt to rally in the final hours of the session, but that was followed by a pullback that ultimately led to a close at an intraday low of $6,499.27.
The decline continued during the early hours of today’s session, causing Bitcoin to fall to as low as $6,447.55. However, the Bitcoin price has managed to recover some of its losses in more recent trading.
Bitcoin’s performance may have been impacted by the release of a report on crypto by the Bank for International Settlements, a Basel-based institution that serves as a central bank for other central banks.
As reported by Bloomberg, the BIS yesterday released a 24-page article on cryptocurrencies as part of its annual economic report. According to the document, Bitcoin and its peers suffered from a number of flaws that would prevent digital currencies from becoming an effective mediums of exchange. The BIS researchers pointed to said that virtual coins were too unstable, consumed too much energy and were subject to too much manipulation and fraud to achieve this ambitious goal.
The BIS analysed what it would take for the blockchain software to process the digital retail transactions currently handled by national payment systems and concluded that “the associated communication volumes could bring the Internet to a halt”.
The researchers did note that blockchain technology could bring some benefits to the global economy, like, for example making cross-border payments more efficient. However, they ultimately concluded that the decentralised nature of cryptocurrencies was a fundamental flaw.
“Trust can evaporate at any time because of the fragility of the decentralized consensus through which transactions are recorded,” the report said, as quoted by Bloomberg. “Not only does this call into question the finality of individual payments, it also means that a cryptocurrency can simply stop functioning, resulting in a complete loss of value.”
In today’s trading, the Bitcoin price stood at $6,496.33, as of $10:58 BST. The digital currency has lost 1% of its value in the past 24 hours, according to data from cryptocurrency tracker Coinmarketcap.
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