Bitcoin down 15 per cent to lowest for the year
02 Feb 2018
Bitcoin fell as much as 15 per cent to its lowest for the year, as concerns mount over increased regulation and the viability of the biggest cryptocurrency.
The cryptocurrency hit a record high of $19,511 on 18 December. Bitcoin has lost over half its value with investors concerned over expectations of more government oversight globally. Additionally, fears of price manipulation, the susceptibility of exchanges to hacking and lingering concern that it is only an asset bubble added to the negative sentiment. The cryptocurrency's ads were also banned on Facebook this week.
''Bitcoin is declining on the Facebook ban on cryptocurrency ads, which occurs amid a regulatory backlash, putting investors even more on edge,'' said Ron Chernesky, chief executive officer of trading platform InvestFeed Inc, livemint.com reported.
Bitcoin slumped to as low as $8,449, partly over fears India may crack down on cryptocurrencies. This comes after recent negative headlines, including a $500-million heist last week from a Japanese cryptocurrency exchange.
''News about India potentially cracking down on cryptocurrencies added to an already bad week in terms of headlines,'' said Andrew Se, cryptocurrency trader and co-founder of research website Cryptoprofile.com. ''We're still correcting as the rally had gone too far.''
Yesterday's drop to as low as $9,022 on the Luxembourg-based Bitstamp exchange left bitcoin trading at less than half the peak price of almost $20,000 it hit in December. It slid over 26 per cent last month, in its worst monthly performance since January 2015.
The surge, last year in the value of digital coins as also the flood of new retail investors drawn to the market have made global regulators nervous about the currencies used largely for speculation.
According to officials cryptocurrencies are used by criminals to launder money. Indian authorities, who see the market as a Ponzi scheme, yesterday vowed to eliminate their use.
Finance minister Arun Jaitley said his government would take "all measures" to remove crypto-assets in "financing illegitimate activities or as part of the payment system".
