Today, Bitcoin plunged back towards $11,000, dropping by as much as 20 percent to mark a four-week low, as the particularly volatile digital currency loses almost $1,000 in only an hour.
According to Coinmarketcap, at around 3 pm, the price of bitcoin was down by 14.14 percent at $11,911.5 per coin. Ethereum, its rival cryptocurrency, also fell by 20 percent to $1,056.38 while Ripple dropped by over 25 percent to $1.36.
Bitcoin stole the headlines throughout the past year as it made a stunning surge from around $1,000 at the beginning of the year to highs of almost $20,000 in December. However, over the Christmas holiday period, the cryptocurrency fell back down to earth. Since then, bitcoin has frequently traded between a range of around $13,000 to $15,000.
As bitcoin gained notoriety in 2017, it also drew more scrutiny. Last week, it was struck hard when South Korea announced its plans to ban trading in cryptocurrencies, even though it said that the plans were not yet finalised, as the government agencies were still in discussions to decide on how to regulate the market.
According to Reuters, today, Yonhap, a South Korean news website, reported that the finance minister of the country had informed a local radio station that the government would be coming up with a series of measures to clamp down on the “irrational” cryptocurrency craze on investment.
A senior market analyst at ETX Capital, Neil Wilson, stated: “Explaining moves in bitcoin is always tricky, but this plunge back to the December 22nd low may well be a result of recent signs that regulatory pressures are building.”
He added: “Bitcoin faces a regulatory crunch sooner or later and increasingly we see signs of this starting to bite following South Korea’s tentative plans to ban trading on cryptocurrencies and China’s move to shutter mines. Latest developments suggest more regulatory pressures.
“Meanwhile there may be growing consensus among European regulators to act in concert. We note that the Bundesbank has called for a global regulation for bitcoin, while France’s finance minister is seeking to draft tougher rules for cryptocurrencies.”
Warren Buffett, a legendary investor, has also recently warned against Bitcoin, saying that it would “come to a bad ending.”