Is the bottom falling out for Bitcoin?

Ivan Schwartz
January 19, 2018

Bitcoin's wild start to 2018 turned breakneck on Wednesday, with the largest cryptocurrency plunging below $10,000 for the first time in six weeks before staging a rally to trade virtually unchanged.

The cryptocurrency, which crashed by more than 50% yesterday, reversed course last evening and is trading for $11,755.13, up by 5.5% from its price a day earlier, at 14:25 UTC. Always research a cryptocurrency before investing in it. However, with the sharp drop in trading value, many are left with nothing to show for their investments.

South Korea's justice minister said last week the ministry was preparing a bill to ban cryptocurrency trading, which sent bitcoin prices sharply lower and threw the market into turmoil.

A slew of blockchain- and bitcoin-related stocks sank on Wednesday following a steep fall in the price of the cryptocurrency over the past few days on fears of regulatory clampdowns. This cost the global market $200 billion during sell-offs Tuesday and Wednesday after South Korea and China hinted at a ban on trading.

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Other reasons potentially contributing to the decline in value is China pushing harder on their crackdown of cryptocurencies.

The government also hinted at new laws to allow officials to close some exchanges of the currency if they felt there was a need to do so. It suggests that the division within administrative bodies may leave just enough wiggle room for South Korea to avoid a complete ban.

What was the needle that punctured the bright Bitcoin bubble? Well, some say not so much. The UK's financial centre has been the location of 90% of all cryptocurrency roles posted in the past year, no doubt owing to the fact that cryptocurrency's top five employers (Wirex Limited, Blockchain, Broadridge, IBM Business Group, and JW Consulting) all have their UK headquarters in London. "I think this one is more pronounced and press-worthy since it is affecting more people and the dollars at stake are greater", said Joe Van Hecke, managing partner at Chicago-based Grace Hall Trading LLC. According to market charts dating back to 2011, and the very beginning of bitcoin, this is just a simple market correction in January, which has been the case each year since then. Ethereum was among the best performing virtual currencies since the start of this year, amid its wide acceptance and unique features compared to bitcoin and ripple. "This is not the end of bitcoin, and if you're smart, now is the time to get in". Cryptocurrencies fell dramatically during early trading on Wednesday, wiping off nearly $2 billion from the total market capitalization. "It has an extremely volatile value, which undermines its use as a currency".

Steven Maijoor, chairman of the European Securities and Markets Authority, said investors "should be prepared to lose all their money" in bitcoin, in a Bloomberg TV interview in Hong Kong.

Other reports by GizPress

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