Bitcoin sinks below $10 000 to bring post-December rout to 50%

2018-01-17 16:56 - Randall Jensen and Todd White, Bloomberg
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New York - Bitcoin tumbled below $10 000, bringing its loss to almost 50% from a record set only a month ago, as increased scrutiny from regulators around the world weighs on the digital-coin craze.

The largest cryptocurrency dropped 7% to $9 968 as of 09:05 in New York, its first foray below $10 000 since December 1, according to consolidated pricing data collated by Bloomberg. It has fallen from a record $19 511 reached on December 18, and seen more than $140bn shaved off its market value.

The selloff this week brings more trauma to a digital-coin market that has lost more than $300bn in value just since January 13. After a dizzying rally pushed Bitcoin higher by 1 400% last year, the latest plunge cast doubt on the viability of cryptocurrencies and the blockchain technology that underpins it.

The most recent signs of a regulatory clampdown have come out of Asia, a hotbed of bitcoin trading.

In South Korea, regulators warned they may shut down cryptocurrency exchanges, while China is said to have intensified its curbs on trading of the digital coins. In the US, the Securities and Exchange Commission asked at least 15 funds to pull applications this month for bitcoin-related exchange-traded funds.

That’s left speculators across the globe struggling to determine when or how market watchdogs may rein in an industry that is decentralized and derives much of its value from anonymous ownership.

It wasn’t supposed to happen that way. When bitcoin futures started trading last month on CME Group and Cboe Global Markets, it triggered speculation that there would soon be a range of crypto ETF and mutual fund offerings. That in turn would draw hordes of new investors and lift bitcoin even higher.

Many assertions that digital coins represent a bubble have triggered double-digit selloffs over the past year, often to be followed by rebounds. It fell 26% in a week after reaching its peak in mid-December, only to rally 21% in the next 10 days. Since then, its posted only two gains in eight sessions.

Bitcoin’s market value has dropped to about $170bn from a peak north of $310bn. The December surge began after the US Commodity Futures Trading Commission agreed to allow trading in bitcoin futures.

The digital coin is still higher by almost 1 000% from a year ago.

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Read more about: cryptocurrencies  |  bitcoin