Bitcoin loses 50pc of its peak value as it sinks below $10,000
Bitcoin tumbled below US$10,000, bringing its loss to almost 50 per cent 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 more than 7 per cent to US$9,593 as of 10.20am in New York (11.15pm HKT), its first foray below US$10,000 since December 1, according to consolidated pricing data collated by Bloomberg.
It has fallen from the record US$19,511 it reached on December 18, and seen more than $140 billion shaved off its market value.
The sell-off this week brings more trauma to the cryptocurrency market, which has lost more than US$300 billion in value just since January 13.
After a dizzying rally pushed bitcoin up by 1,400 per cent 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 has left speculators across the globe struggling to determine when or how market watchdogs may rein in an industry that is decentralised 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 Inc and Cboe Global Markets Inc exchanges, 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 sell-offs over the past year, often to be followed by rebounds.
It fell 26 per cent in a week after reaching its peak in mid-December, only to rally 21 per cent in the next 10 days. Since then, its posted only two gains in eight sessions.
Bitcoin’s market value has dropped to about US$170 billion from a peak north of US$310 billion. 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 per cent from a year ago.
