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Bitcoin Nearly Breaks Below the $10,000 Mark on Escalating Concerns of Regulations

January 17, 2018 at 13:16 by Yahia Barakah

The price of Bitcoin plunged to the lowest level since early December 2017 on Wednesday, as a result of growing fears that a number of countries may crack down on cryptocurrencies in the near future. The sharp losses were not limited to Bitcoin as other cryptocurrencies, including Ethereum and Ripple, also declined to their worst levels in multiple weeks.

Governments around the world appear increasingly concerned about the massive rapid gains of cryptocurrencies in recent months, which may have been the result of excessive speculative behaviors. The lack of any concrete underlying support for the meteoric rise of digital assets like Bitcoin is an alarming signal of an overvaluation bubble that could eventually end badly for many traders.

Another main concern that policymakers have relates to the unregulated and decentralized nature of virtual currencies, which could facilitate funding criminal activities and money laundering. These concerns were voiced by South Korea’s Finance Minister Kim Dong-yeon, who said in an interview to a local radio that preventing virtual currency exchanges from operating is an option.

South Korea is a leading cryptocurrency market and a crackdown by the South Korean government will certainly inflect serious damage to the price of Bitcoin. Officials from the government, including Prime Minister Lee Nak-yon, sought to calm investors following the finance minister’s comments. The prime minister said that shutting down cryptocurrency exchanges would be decided only after several talks and would require the approval of the National Assembly.

However, Bitcoin’s decline remained at full steam as a second sign of troubles came from China, another major market for cryptocurrencies. The People’s Bank of China Vice Governor Pan Gongsheng reportedly sought to ban cryptocurrency trading and businesses that facilitate such activity.

The news was followed by a warning notice from Shenzhen Stock Exchange, one of the biggest exchanges in China, which said that it would punish companies that uses the term blockchain to boost their stock value.

Bitcoin, which almost touched $20,000 in December 2017, quickly fell following these concerning signals of possible bans or trading restrictions. The virtual currency is currently floating slightly above $10,000 as investors are keeping a close eye on these developments.

BTC/USD traded at 10,422.0 on the Bitstamp exchange as of 12:55 GMT on Wednesday after touching 10,173.4 at 11:00 GMT, the pair’s lowest level since December 2. BTC/USD began trading today at 11,589.9.

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

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