Today, bitcoin plunged below $10,000 having lost nearly half of its value from its peak of almost $20,000 as worries regarding a regulatory clampdown continued.
According to the aggregate price index of Coindesk, the cryptocurrency plummeted to as low as $9,801, bitcoin’s lowest point since before December.
The market cap of Bitcoin has lost tens of billions of dollars since Monday as the digital currency lost favour with various traders. Today, it dropped to below $170bn from around $240bn on Monday.
Other rival cryptocurrencies also dropped below key levels, with Eethereum losing hundreds of dollars from well more than $1,000 to trade below $900 and Ripple falling under $1.
The sharp losses started yesterday as a response to reports of the finance minister of South Korea hinting that banning of the trade in cryptocurrencies remains to be an option. The finance minister said that the government was drafting measures to clamp down on the “irrational” investment craze on cryptocurrencies.
Yesterday, a top Chinese central banker also said that authorities should prohibit centralised trading in cryptocurrencies.
A research analyst at FXTM, Lukman Otunuga, stated: “Market jitters over South Korea potentially banning cryptocurrency trading has effectively eroded investor appetite for bitcoin.” He added that losses could also be on the cards.
Notwithstanding the huge losses, the managing director at UFX, Dennis de Jong, said that it was still too early to imply whether the bubble has burst completely.
“This could be the ‘price adjustment’ that market experts had warned of lately,” said de Jong.
“The majority of those experts maintain that market volatility is to be expected, so don’t be surprised to see a resurgence in bitcoin in the coming weeks – it’s unlikely that there will be any large-scale panic departures from the market just yet.”