MI
- Bitcoin cleared $16,000 Tuesday after a rough week for the digital coin.
- It was trading up 15% at $16,026 a coin at 11:53 a.m. ET, according to data from Markets Insider.
Bitcoin climbed back over $16,000 a coin after a holiday season slump.
The second half of December was a tough one for the red-hot cryptocurrency.
After hitting an all-time high above $19,500 on December 17, the digital coin witnessed one of its most dramatic downturns in 2017. It bottomed out on December 22 at $10,834, according to data from cryptocurrency watcher CoinDesk.
But it was trading in the green Tuesday morning at $16,026, up 15% against the US dollar.
Most market watchers expected the downturn and thought it was healthy considering bitcoin's explosive gains in November.
Tom Lee, the cofounder of Fundstrat, doubled down on his bullish stance while bitcoin plunged, raising his mid-2018 target to $20,000 from $11,500. He estimates that fair value for bitcoin is $19,103, or about 26% above its current levels.
As for the correction, economist and Bloomberg View columnist Mohamed El-Erian noted in an op-ed Tuesday it indicates a critical junction for the coin.
If the correction successfully shook out "excessive irrational exuberance," then it could pave the way for the development of a more mature ecosystem for cryptocurrencies, according to El-Erian. Such an ecosystem could protect retail investors in the case of a bubble burst.
"Absent this, not even the deep commitment of true believers will be enough to protect individual retail investors who would end up experiencing a price appreciation and collapse that would rival even the biggest investment bubbles in history," he wrote.
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