Bitcoin sinks below $10,000, losing half its value in a month
Bitcoin tumbled below $10,000, bringing its loss to almost 50% 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 10% to $9,610.05 as of 6:33 a.m. PST, its first foray below $10,000 since Dec. 1, according to consolidated pricing data collated by Bloomberg. It has fallen from a record $19,511 reached Dec. 18, and has seen more than $140 billion shaved off its market value.
The selloff this week brings more trauma to a digital-coin market that has lost more than $300 billion in value since Saturday. After a dizzying rally pushed bitcoin up 1,400% 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 U.S., 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 decentralized 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 selloffs over the last year, often to be followed by rebounds. It fell 26% in a week after reaching its peak in mid-December, only to rally 21% in the next 10 days. Since then, it has posted only two gains in eight sessions.
Bitcoin’s market value has dropped to about $170 billion from a peak of more than $310 billion. The December surge began after the U.S. Commodity Futures Trading Commission agreed to allow trading in bitcoin futures. The digital coin’s price is still almost 1,000% higher than it was a year ago.
Jensen and White write for Bloomberg.
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