Home Market Bitcoin drops below $10,000 as downward spiral continues

Bitcoin drops below $10,000 as downward spiral continues

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Bitcoin dropped below $10,000 today having halved from its peak of nearly $20,000 as fears of a regulatory clampdown persisted.

The cryptocurrency dropped to as low as $9,801, its lowest point since before December, according to Coindesk's aggregate price index.

Bitcoin's market cap has shed tens of billions of dollars since Monday as the digital currency lost favour with traders. It fell to below $170bn today from about $240bn on Monday.

Rival cryptocurrencies also fell below key levels, with ethereum dropping hundreds of dollars from well over $1,000 to trade below $900 and Ripple dropping under $1.

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The sharp losses began yesterday in response to reports of South Korea’s finance minister hinting that banning trading in cryptocurrencies was still an option. He said the government was planning measures to clamp down on the “irrational” cryptocurrency investment craze.

A top Chinese central banker also said yesterday that authorities should ban centralised trading in cryptocurrencies.

"Market jitters over South Korea potentially banning cryptocurrency trading has effectively eroded investor appetite for bitcoin," said Lukman Otunuga, research analyst at FXTM, adding that further losses could be on the cards.

Despite the huge losses, Dennis de Jong, managing director at UFX, said it was still too early to suggest whether the bubble has completely burst.

"This could be the ‘price adjustment’ that market experts had warned of lately," he said.

“The majority of those experts maintain that market volatility is to be expected, so don’t be surprised to see a resurgence in bitcoin in the coming weeks – it’s unlikely that there will be any large-scale panic departures from the market just yet.”

Read more: Bitcoin tumbles below $12,000 as it sheds nearly $1,000 in an hour

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