Bitcoin slumps below a million as regulatory fears intensify
9 months ago, 17 Jan 20:17
Bitcoin skidded below Sh1 million ($10,000) on Wednesday, halving in value from its peak price, with investors gripped by fears regulators could clamp down on the volatile cryptocurrency that sky-rocketed last year. The price of bitcoin, the world’s biggest and best known cryptocurrency, fell to as low as around Sh950,000 ($9,500) on the Luxembourg-based Bitstamp exchange, the lowest since Dec. 1. Bitcoin had touched a peak of almost Sh2 million ($20,000) in December - and indeed crossed over that threshold on some exchanges - but has since been roiled by several large selloffs. Other cryptocurrencies plunged as well. Ethereum and Ripple were both down heavily after reports South Korea and China could ban cryptocurrency trading, sparking worries of a wider regulatory crackdown. “There is a lot of panic in the market. People are selling to try and get the hell out of there,” said Charles Hayter, founder of Cryptocompare, which owns cryptocurrencies. “You have more regulatory uncertainty ... and because of these falls, you have these other fallouts,” he said, referring to the collapse of some cryptocurrencies in the recent slump in prices. Analysts at Citi said on Wednesday bitcoin could halve again in value amid the current rout, adding that a possible fall to between the $5,605 and $5,673 area “looks very likely to be very speedy”. With South Korea, Japan and China all making noises about a regulatory swoop, and officials in France and the United States vowing to investigate cryptocurrencies, there are concerns that global coordination on how to regulate them will accelerate. Officials are expected to debate the rise of bitcoin at the upcoming G20 summit in Argentina in March. “Cryptocurrencies could be capped in the current quarter ahead of the G20 meeting in March, where policymakers could discuss tighter regulations,” said Shuhei Fujise, chief analyst at Alt Design. Bitcoin has plummeted before. Marc Singer, an adviser at Singer Xenos in Miami, noted bitcoin fell 93 percent in value over a five-month period in 2011. The last time bitcoin more than halved in value was from November 2014 to January 2015. Tuesday’s decline followed reports that South Korea’s finance minister had said banning trading in cryptocurrencies is still an option and that Seoul plans a set of measures to clamp down on the “irrational” cryptocurrency investment craze. Separately, a senior Chinese central banker said authorities should ban centralized trading of virtual currencies as well as individuals and businesses that provide related services. “Bitcoin is deciding whether this is the moment to crash and burn,” said Steven Englander, head of strategy at New York-based Rafiki Capital. “My conjecture is that cryptocurrency holders are trying to decide whether to abandon bitcoin because its limitations mean it will be superseded by better products or bet that it can thrive despite them.” Wild swings Cryptocurrencies enjoyed a bumper year in 2017 as mainstream investors entered the market and as an explosion in so-called initial coin offerings (ICOs) - digital, token-based fundraising rounds - drove demand. While many observers say the ...
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