Investing.com - The price of digital currency bitcoin rebounded on Thursday after falling below the $9,500 level on Wednesday amid a selloff in cryptocurrencies sparked by fears over a regulatory crackdown.
Bitcoin was trading at $11,228 by 05:03 AM ET (10:03 GMT) on the Bitfinex exchange, up 9.13% from its previous close.
Prices fell as low as $9,231.0 on Wednesday, the weakest level since November 30 a fall of more than 50% from its December 17 peak of $19,891 on Bitfinex and more than $20,000 on other exchanges.
Bitcoin, which is known for sharp swings, has tended to rebound quickly from pullbacks.
At current prices bitcoin has a total market capitalization of around $192 billion after around $30 billion was wiped off its market value by the price plunge.
Cryptocurrencies have experienced a volatile start to 2018 after a massive rally last year as worries over increased regulatory scrutiny hit the market.
Ethereum, the world’s second largest cryptocurrency by market cap, was last at $998.29 on the Bitfinex exchange, up from Wednesday’s low of $770.10.
Ripple's XRP token was trading at $1.4 on the Poloniex exchange, after falling around 25% on Wednesday before recovering.
Policymakers in South Korea once again indicated on Thursday that they are considering shutting down domestic cryptocurrency exchanges. The country is one is one of the largest markets for major coins like bitcoin and ethereum.
Cryptocurrency trading in South Korea is highly speculative and digital currencies are often traded at a premium, meaning that they are priced significantly higher in the country's exchanges than elsewhere in the world.
Analysts at Capital Economics said Thursday that the latest bitcoin price falls “suggest that the bubble is bursting” although because the price was still ten times higher than it was a year ago, it still had a long way further to fall.
In a research note, analysts said the surge in the price was not being driven by any strategic world view but more a simple belief that it will continue to rise in value.
“Most people are buying bitcoin, not because of a belief in its future as a global currency, but because they expect it to rise in value,” the note said.
“Accordingly, it has all the hallmarks of a classic speculative bubble, which we expect to burst. When it will fully burst is anyone’s guess and prices could yet rise again, before they fall further ahead,” they added.