Bitcoin tanks in biggest intraday price drop this year. Here's why

A large "sell order" of bitcoin caused its price to crash by nearly 10 percent on Friday.

The cryptocurrency lost close to $1,000 early Friday morning, falling to about $6,777. It later recovered to around $7,000 after Bitstamp, a leading crypto exchange, said one large order of the digital currency caused the crash.

"A large sell order was executed on our BTC/USD pair today, strongly impacting the order book. Our system behaved as designed, processing and fulfilling the client’s order as it was received," Bitstamp said in a tweet.

It added that it is closely examining every event that caused the large-scale movement in its order book and that it "started an immediate case investigation."

Still, bitcoin enthusiasts on Twitter weren't too pleased with the news.

However, despite the one-day drop, bitcoin remains up more than 90 percent year-to-date and up more than 30 percent since the start of the month.

This week, the cryptocurrency jumped above $8,000 for the first time this year, despite a few negative controversies, including a massive heist last week in which hackers ran off with more than $41 million worth of bitcoin on one the world's largest crypto exchanges. The breach forced the exchange to suspend all deposits and withdrawals for at least one week.

On top of that, last month, the entire crypto market shed about $10 billion amid regulatory worries and questions around the legitimacy of tether, also known as "stablecoin", which has been pegged to the U.S. dollar.

In April, New York's Attorney General Letitia James accused both Bitfinex, a bitcoin exchange platform, and tether issuer Tether Limited of hiding an $850 million loss and misleading investors.


“Our investigation has determined that the operators of the ‘Bitfinex’ trading platform, who also control the ‘tether’ virtual currency, have engaged in a cover-up to hide the apparent loss of $850 million dollars of a co-mingled client and corporate funds,” James said in a statement.

However, the debate around bitcoin and other cryptocurrencies have always had its share of critics and supporters.

Earlier this month, billionaire investor Warren Buffett continued to slam bitcoin as a "gambling device."

Buffett told FOX Business' Liz Claman that it simply doesn't produce anything substantive.

“[Bitcoin] doesn’t reproduce. It doesn’t speak to you. And it doesn’t do anything. It’s like a seashell or something, and that is not an investment to me,” he said during Berkshire Hathaway's annual shareholder meeting in Omaha, Nebraska.

Meanwhile, billionaire investor Tim Draper is extremely bullish on the crypto, telling Claman last week that he believes bitcoin will take 5 percent of the global market share in four years time.