Bitcoin follows crushing losses on world stock markets, falls below $6,000

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Updated: February 6, 2018 2:15:16 PM

Continuing its unpredictable move right at the start of 2018, popular digital currency Bitcoin on Tuesday plunged 20 percent to a three-month low. The digital currency fell to a low of $5,995.58, at the time of reporting, its lowest since mid November, according to CoinDesk, whose bitcoin price index tracks prices from four major exchanges.

Bitcoin, Income tax india, cbdt, sushil chandra, bitcoin return, bitcoin exchange in india, how to buy bitcoin, invest in bitcoinContinuing its downward move right at the start of 2018, popular digital currency Bitcoin on Tuesday plunged 20 percent  to a three-month low on Tuesday. (Image: Reuters)

Continuing its downward move right at the start of 2018, popular digital currency Bitcoin on Tuesday plunged 20 percent  to a three-month low. The digital currency fell to a low of $5,995.58, at the time of reporting, its lowest since mid November, according to CoinDesk, whose bitcoin price index tracks prices from four major exchanges. This latest fall follows a series of setbacks for the cryptocurrency with a collapse across global mainstream markets adding to the selling. Today’s collapse comes just six weeks after bitcoin hit a record high of $19,511, fuelled by a flood of speculators looking to make a quick buck, with warnings it could fall another 50 percent.

The sell-off on Tuesday was exacerbated by crushing losses on world stock markets, with the Dow on Wall Street suffering its biggest one-day points loss and wiping out all its 2018 gains. The global rout comes as panicked investors fret over rising US borrowing costs, leading them to cash in profits after a stellar couple of months that have seen many indexes hit record or all-time highs. Equities have enjoyed months of surges fuelled by optimism over the US economy, corporate earnings and the global outlook. But while traders have been piling into equities, pushing many global indexes to record or multi-year highs, there has been growing concern on trading floors about elevated US Treasury bond yields — at four-year highs — and the likelihood of fresh Federal Reserve interest rate hikes.

Since those heady days the cryptomarket — which includes dozens of other units — has been pounded by news of crackdowns by governments including in China, Russia and South Korea, one of the biggest markets for the sector. On Thursday, India said it would “take all measures to eliminate” cryptocurrencies’ use as part of a payment system and in funding illegitimate activities, while Japanese authorities raided a virtual currency exchange after it lost $530 million to hackers, AFP reported.

On Monday, Nouriel Roubini, the man who predicted the 2008 US housing bubble had said: “This (Bitcoin) is mother of all bubbles and it is also the biggest bubble in human history if you compare it to Mississippi bubble, tech bubble, and Tulip mania.”

Indian ace investor, Porinju Veliyath had tweeted earlier today, “Wow, Bitcoin @ $6,500! Had warned at near the peak in Dec. Bitcoin could fall 99% from current levels before it stops trading, I feel.”

On Thursday, India said it would “take all measures to eliminate” cryptocurrencies’ use as part of a payment system and in funding illegitimate activities, while Japanese authorities raided a virtual currency exchange after it lost $530 million to hackers. Central bank in Europe, Japan and the United States have also flagged concerns about the unit and this week saw several commercial lenders say they would stop allowing their customers to buy bitcoin through their credit cards owing to debt concerns.

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