Bitcoin and other digital currencies plunged late on Thursday, a slide likely to stoke speculation about the durability of the boom in cryptocurrencies.

Bitcoin slumped as much as 8.7%, the most since early August, while other digital coins like ether posted double-digit percentage declines. The Bloomberg Galaxy Crypto Index at one point slid more than 6%.

“Conditions are very massively overbought and bound for a correction,” said Vijay Ayyar, head of business development with crypto exchange Luno. “So I don’t think it’s unusual, frankly. I still believe we’ll see all-time highs before a larger drop/correction.”

Even with the retreat, bitcoin has more than doubled this year and until recently was knocking on the door of the record high of US$19 511 set in 2017. Crypto believers tout purchases by retail investors, institutions and even billionaires, as well as the search for a hedge against dollar weakness, as reasons why the boom can last.

Sceptics argue that the cryptocurrency’s famed volatility portends a repeat of what happened three years ago, when boom turned to epic bust.  — Reported by Eric Lam, (c) 2020 Bloomberg LP