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Bitcoin Hits Low for Year as Laundry List of Concerns Increases

Cryptocurrency NewsFeb 01, 2018 11:31AM ET
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© Bloomberg. A bitcoin logo sits on a LL 1800W power unit supplying cryptocurrency mining machines at the SberBit mining 'hotel' in Moscow, Russia, on Saturday, Dec. 9, 2017. Futureson the worlds most popular cryptocurrency surged as much as 26 percent in their debut session on Cboe Global Markets Inc.'s exchange, triggering two temporary trading halts designed to calm the market.

(Bloomberg) -- Bitcoin slumped to its low for the year after seeing more than $44 billion in market value lost during January amid mounting concerns of increased regulation and the viability of the cryptocurrency.

After reaching a record high of $19,511 on Dec. 18, Bitcoin has lost more half its value as the digital token has been weighed down by expectations of more government oversight globally, fears of price manipulation, the susceptibility of exchanges to hacking and lingering concern that it’s all just an asset bubble. Facebook (NASDAQ:FB) announce a ban on cryptocurrency ads this week.

Bitcoin declined as much as 8.7 percent today to $9,100, the lowest since November, in part on concern India may crack down on cryptocurrencies. That follows a spate of recent negative headlines, including a $500 million heist from a Japanese cryptocurrency exchange.

"News about India potentially cracking down on cryptocurrencies added to an already bad week in terms of headlines," said Andrew Se, cryptocurrency trader and co-founder of research website Cryptoprofile.com. “We’re still correcting as the rally had gone too far."

Bitcoin’s dizzying 1,400 percent ascent last year, which created $200 billion in new wealth for investors, has made its 30 percent fall in January all the more painful. The $44.2 billion in market value lost last month is by far a record for the digital currency, whose entire market cap hadn’t come close to that amount until 2017, according to price data from Coinmarketcap.com.

India’s Finance Minister Arun Jaitley told lawmakers in New Delhi on Thursday the country doesn’t consider cryptocurrencies legal tender “and will take all measures to eliminate use of these crypto-assets in financing illegitimate activities or as part of the payment system,” while it will explore the use of blockchain technology.

While major U.S. exchanges launched Bitcoin futures contracts in December, there has been a push back elsewhere. South Korean banned anonymous trades and is considering a ban on exchanges, a move China already took last year.

Naeem Aslam, chief market analyst at TF Global Markets in London said regulatory news are a long-term positive.

“Regulatory pressure is only a blip,” he said. “Speaking with investors, they are comfortable that now we have some regulatory framework around this, this doesn’t deter them but only foster their confidence in the technology.”

Bitcoin Hits Low for Year as Laundry List of Concerns Increases
 

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Shashi Meghawarna
Shashi Meghawarna Feb 01, 2018 12:13PM ET
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heard Russia and south Korea going to lift up with some regulations but not to bang..then what will happen to BTC? and i think Ethereum is rising against BTC. need some comments please
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Niko Kujala
Niko Kujala Feb 01, 2018 12:13PM ET
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Im betting for bcash at top 5 coinis
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Timothy Ettinger
MainStEconomist Feb 01, 2018 12:13PM ET
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Yea, ethereum did hold up well against the bitcoin core downdraft. This sell off could be in part due to a revolt against bitcoin core.. the high fees relative to other cryptos surely is not helping to hold up it's price the past month. There is the possibility if core does not get it's act together soon, it will be overtaken in market cap, possibly by ethereum! Yes I do like bitcoin cash as well, and a top 5 place for it is reasonable. I am not for or against one or the other in that argument, but in terms of transactions in my book right now, bitcoin cash wins hands down.
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