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Bitcoin Falls to Lowest Level in Seven Days on Concerns of Overvaluations

December 20, 2017 at 13:51 by Yahia Barakah

The price of Bitcoin decreased on Wednesday to continue a streak of losses that began after the digital currency reached an all-time high near $20,000 on Sunday. Growing concerns that the digital asset could be overvalued were the main reason behind Bitcoin’s recent decline.

Bitcoin was seen trading today at around $16,000, about 20% below its recent record high, before recovering to levels above $17,300. The digital currency has been on decline this week since CME Group Inc., which represents one of the largest exchanges in the world, launched a new Bitcoin futures product. The launch came about a week after rival firm Cboe Global Markets launched its own bitcoin futures, which was the first in the world.

Introducing Bitcoin futures improves the ease of accessing the digital currency market for institutional investors. However, the rapid gains of Bitcoin over the past weeks have spurred a number of warnings from experts and policymakers.

The Monetary Authority of Singapore, which acts as the central bank of the nation, issued a warning on Tuesday against investing in virtual currencies. Recent surges were viewed by the authority as resulting from speculations, which increase the risk of a sharp decline.

South Korea also had its own say against Bitcoin. The South Korean Financial Supervisory Service said yesterday that it does not consider the digital asset as a currency. The financial regulator added that no further regulations for digital assets will be added to the rules that are already in place.

The list of warnings did not end there as Japan’s Finance Minister Taro Aso said yesterday that Bitcoin has so far failed to prove itself as a credible currency. His comment came despite Japan’s recognition of Bitcoin as a legal currency back in April.

Japanese investors became even more concerned following a tweet from a Japanese trading expert known as Cis. The trader wrote that he sold some of his Bitcoins, which was seen by many as a sign that he worried about a possible sharp drop. The Japanese market accounts for at least 30% of Bitcoin’s worldwide trading.

BTC/USD traded at 17,384.8 on the Bitstamp exchange as of 13:35 GMT on Wednesday after reaching 16,001.0 during early trading hours, which marked the lowest level since December 14. BTC/USD began trading today at 17,610.0.

If you have any questions and comments on Bitcoin today, use the form below to reply.

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