Bitcoin plunges over 20% from December highs as cryptocurrency crackdown fear gains strength worldwide

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Updated: January 17, 2018 11:20:34 AM

Bitcoin fell 14 percent to $11,940 in London, the lowest level since late December, according to composite pricing on Bloomberg. Bitcoin reached a new all-time high of $19,783.06 early December 17 last year, according to Coindesk’s price index.

bitcoin, arun jaitley on bitcoin, is the bitcoin legal, bitcoin authenticity in india, what is bitcoin, can i use bitcoin in india, where to purchase bitcoinBitcoin reached a new all-time high of $19,783.06 early December 17 last year. (Image: Reuters)

Cryptocurrency selloff in January received fresh momentum after the popular digital currency Bitcoin plunged over 20 percent as the prospect of regulatory crackdown appeared to spread worldwide. While the largest digital coin was down 25 percent at $10,338 as of 4:37 p.m. in New York, it was still at the lowest level since early December, according to composite pricing on Bloomberg. As Bitcoin halted its two-day rally, rival cryptocurrencies also tumbled. Ripple sank as much as 40 percent and Ethereum dropped 26 percent. Bitcoin reached a new all-time high of $19,783.06 early December 17 last year, according to Coindesk’s price index. Bitcoin was trading at $11,189 on CoinDesk at the time of writing the report. Other cryptocurrencies also plunged. Speculators across the globe are struggling to determine when or how market watchdogs may rein in an industry that’s decentralized and derives much of its value from anonymous ownership.

In South Korea, shutting down cryptocurrency exchanges is still an option, finance minister Kim Dong-yeon said in an interview with TBS radio. But measures first need “serious” discussion among ministries, Kim added, holding out hope for traders that a crackdown won’t go that far. Kim said there’s irrational speculation and that rational regulation was needed.

China, which first began targeting the industry last year, is escalating its clampdown on cryptocurrency trading, particularly online platforms and mobile apps that offer exchange-like services, according to people familiar with the matter. Steven Maijoor, chairman of the European Securities and Markets Authority, said investors “should be prepared to lose all their money” in bitcoin, in a Bloomberg TV interview in Hong Kong. “It has an extremely volatile value, which undermines its use as a currency,” he said. “It’s also not broadly accepted.”

The Reserve Bank of India is also not much enthused by the idea of trading in cryptocurrency. The central bank issued several warnings about the potential economic, financial, operational, legal, customer protection and security related risks associated with dealing in such VCs. The income tax (I-T) department also issued notices to 4 lakh to 5 lakh high net-worth individuals (HNI) across the country last year who were trading on the exchanges just days after the taxman conducted surveys at nine such exchanges across the country. Market watchdog Sebi also issued similar warnings last year. Finance Ministry on December 15 last year formed a new panel to frame response with respect to the Bitcoin issue.  The government in April last year had constituted a committee comprising nine members including representatives of RBI, SBI, NITI Aayog and Department of Financial Services to examine the existing framework on digital or cryptocurrencies both in India and globally and recommend measures for dealing with threats arising out of such virtual currencies such as money laundering  and others.

The US Securities and Exchange Commission sounded a warning last year about cryptocurrency risks, urging investors to “exercise caution” in dealing with units like Bitcoin. State and federal regulators may not be able to recoup any lost investments from illegal actors, the markets watchdog said.

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