The cryptocurrency has gone through its worst month in three years as regulators take a harder look
Bitcoin was an unquestionable phenomenon last year, undergoing jaw-dropping growth that attracted a cryptocurrency rush among investors. Numerous companies and fund providers have gotten in on the action, with the former raising funds through ICOs and the latter seeking regulators’ blessings to launch crypto funds.
But the first month of 2018 has not been kind to the world’s top cryptocurrency. As reported in the Wall Street Journal, its price has plummeted by around 30% in January, putting it on pace for its worst monthly drop in three years. On Wednesday, it fell below US$10,000 — around half of its peak value of almost US$20,000 in December.
While Bitcoin is known for deep plunges, it’s typically able to recover within a day. Extended periods of decline are much rarer: the digital currency has shed more than 30% in a given month on only three other instances within the last five years.
Celebrating our industry successes in the wealth management industry
The current rout is due to several factors, not least of which is the clampdown by regulators and governments around the world, according to the Journal. This week, the US Securities and Exchange Commission (SEC) stepped in to halt a US$600-million initial coin offering; previous to that, the top US derivatives regulator brought charges in three cases involving virtual currencies.
Asian governments are taking a similarly hard stance. The Chinese government has cracked down in bitcoin mining operations. Japan has held a positive position, but may reverse course after a US$530-million heist hit cryptocurrency exchange Coincheck last week.
South Korea is also tightening the reins. The country has put forward new legislation to cool the red-hot bitcoin market, and an ongoing investigation by its customs service has reportedly uncovered illegal foreign-exchange dealings amounting to US$592.9 million carried out through cryptocurrencies. A Tuesday ruling by a South Korean court to confiscate bitcoin proceeds, made as part of a judgment against an illegal pornography site, sets another restrictive precedent.
Facebook also dealt a blow to the space recently by vowing to halt ads promoting cryptocurrencies and initial coin offerings, which it described as “financial products and services frequently associated with misleading or deceptive promotional practices.”
But the first month of 2018 has not been kind to the world’s top cryptocurrency. As reported in the Wall Street Journal, its price has plummeted by around 30% in January, putting it on pace for its worst monthly drop in three years. On Wednesday, it fell below US$10,000 — around half of its peak value of almost US$20,000 in December.
While Bitcoin is known for deep plunges, it’s typically able to recover within a day. Extended periods of decline are much rarer: the digital currency has shed more than 30% in a given month on only three other instances within the last five years.
Celebrating our industry successes in the wealth management industry
The current rout is due to several factors, not least of which is the clampdown by regulators and governments around the world, according to the Journal. This week, the US Securities and Exchange Commission (SEC) stepped in to halt a US$600-million initial coin offering; previous to that, the top US derivatives regulator brought charges in three cases involving virtual currencies.
Asian governments are taking a similarly hard stance. The Chinese government has cracked down in bitcoin mining operations. Japan has held a positive position, but may reverse course after a US$530-million heist hit cryptocurrency exchange Coincheck last week.
South Korea is also tightening the reins. The country has put forward new legislation to cool the red-hot bitcoin market, and an ongoing investigation by its customs service has reportedly uncovered illegal foreign-exchange dealings amounting to US$592.9 million carried out through cryptocurrencies. A Tuesday ruling by a South Korean court to confiscate bitcoin proceeds, made as part of a judgment against an illegal pornography site, sets another restrictive precedent.
Facebook also dealt a blow to the space recently by vowing to halt ads promoting cryptocurrencies and initial coin offerings, which it described as “financial products and services frequently associated with misleading or deceptive promotional practices.”
