BackBitcoin hits 2018 low as concerns mount on regulation, viability
Bitcoin prices slump as much as 15% amid mounting concerns of increased regulation and the viability of the biggest cryptocurrency
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New York: Bitcoin slumped as much as 15%, sending the digital coin to its low for the year, amid mounting concerns of increased regulation and the viability of the biggest cryptocurrency.
After reaching a record high of $19,511 on 18 December, Bitcoin has lost more than half its value as the token has been weighed down by expectations of more government oversight globally, fears of price manipulation, the susceptibility of exchanges to hacking and lingering concern that it’s all just an asset bubble. Facebook announced a ban on cryptocurrency ads 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.
Bitcoin tumbled to as low as $8,449, the least since November, in part on concern India may crack down on cryptocurrencies. That follows a spate of 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."
Bitcoin’s dizzying 1,400% ascent last year, which created $200 billion in new wealth for investors, has made its 30% fall in January all the more painful. The $44.2 billion in market value lost last month is by far a record for the digital currency, whose entire market cap hadn’t come close to that amount until 2017, according to price data from Coinmarketcap.com.
India’s finance minister Arun Jaitley told lawmakers in New Delhi on Thursday the country doesn’t consider cryptocurrencies legal tender “and will take all measures to eliminate use of these crypto-assets in financing illegitimate activities or as part of the payment system," while it will explore the use of blockchain technology.
While major US exchanges launched Bitcoin futures contracts in December, there has been a push back elsewhere. South Korean banned anonymous trades and is considering a ban on exchanges, a move China already took last year.
Naeem Aslam, chief market analyst at TF Global Markets in London said regulatory news are a long-term positive.
“Regulatory pressure is only a blip," he said. “Speaking with investors, they are comfortable that now we have some regulatory framework around this, this doesn’t deter them but only foster their confidence in the technology." Bloomberg
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