Financial

Bitcoin extends slide, falls below $7 000

Read time 2min 20sec
Bitcoin has bounced back from similar collapses before, says an investor.
Bitcoin has bounced back from similar collapses before, says an investor.

Digital currency Bitcoin fell more than 15% yesterday to a nearly three-month low amid a slew of concerns ranging from a global regulatory clampdown to a ban on using credit cards to buy Bitcoin by British and US banks.

On the Luxembourg-based Bitstamp exchange, Bitcoin fell as low as $6 853.53 in early afternoon trading in New York, falling from a peak of almost $20 000 in December.

Bitcoin has fallen in six of the last eight trading sessions.

The currency, which surged more than 1 300% last year, has lost about half its value so far in 2018, as more governments and banks signal their intention for a regulatory crackdown. Last week, Bitcoin suffered its worst weekly performance since 2013.

"We envisage this decline will continue, setting the next technical level at $5 000 a coin," said Miles Eakers, chief market analyst at Centtrip, which specialises in foreign exchange, worldwide payments and treasury management.

Other crypto-currencies also suffered double-digit declines on Monday, according to industry tracker Coinmarketcap.com.

Ethereum, the second largest virtual currency, was last down nearly 19% at $703.40, while Ripple, the third largest, and last traded at 71 cents, down 14.1%.

British bank Lloyds Banking said on Sunday it was banning customers from using credit cards to buy Bitcoin. It joined US banking giants JPMorgan Chase and Citigroup, which announced similar bans on concerns the lenders could be held liable when the volatile currencies plunge in value.

On Monday, India said it was planning steps to make virtual currencies illegal within its payments system and to regulate the trading of crypto assets.

"Crypto-currencies have seriously fallen out of favour since the middle of December, and constant negative news flow and speculation of increased regulation has exacerbated the move lower," said Craig Eelam, an analyst at currency broker Oanda.

The crypto-currency sector has also attracted the spotlight after news of hacks and scams, including the roughly 58 billion yen ($532.9 million) stolen in digital money from Tokyo-based crypto-currency exchange Coincheck two weeks ago.

But some investors were unfazed.

"Bitcoin has bounced back from similar collapses before during its short but volatile history, and it would hardly be a shock if those claiming the bubble has burst are surprised by yet another change in fortunes," said Dennis de Jong, MD of online FX brokerage firm UFX.com in Cyprus.

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