Bitcoin price drops 20pc in three days


After Bitcoin hit record levels, the virtual currency’s price drastically dropped during the last three days.

Other cryptocurrencies’ values including that of Ripple and Ethererum have also dropped, clearing billions off from their combined values.

The said currencies have increased in value in recent months amid rising interest in a newly-popular way for businesses to raise funds called the initial coin offerings (ICOs).

The increasing prices of Bitcoin, Ethereum, and other cryptocurrencies appeared to oppose warnings regarding a bubble, but skeptics assume that a crash will only be a matter of time.

On Saturday, Bitcoin achieved a record high of around $5,000 (£3,870) but started to drop shortly after, with many owners seemingly taking the milestone as an opportunity to trade their investments.

It declined further on Monday when Chinese regulators proclaimed a ban on ICOs and on Tuesday morning traded for as low as $4,000, a 20pc decrease in just less than three days. Worries of a bubble were also probably compounded when Paris Hilton became the latest celebrity to declare that she was investing in an ICO.

The currency that is used in many ICOs, Ethereum, did even worse, plunging by almost 30pc from its $400 peak on Saturday.

Combined with falls in others such as Ripple and Bitcoin Cash, more than $30bn has been wiped off the total value of the major cryptocurrencies since Saturday.

This year, the currencies have increased. Bitcoin’s $5,000 peak on Saturday compares to less than $1,000 in January and Ethereum had reached $400 from just $8 at the start of the year.

Allowing companies to raise funds without many of the regulations that are tied to more traditional methods such as trading shares, ICOs have been seen as something of a wild west. According to Autonomous Research, more than $1.2bn was raised in the first half of 2017.

While their adoption by businesses such as Kik, the messaging app, and endorsements by several celebrities have appeared to be a mark of approval, numerous investors have lost money because of scams, and they have now drawn the attention of regulators. On Monday, China’s central bank ordered that ICOs “cease immediately.”