After the 2017 bull run of the world's largest digital currency, Bitcoin, the digital token has tumbled to its lowest level since February. Increased government scrutiny and the degraded public image of the digital currency has renewed investor concerns about its long-term viability.
The price of the digital coin fell as much as 4.6% Tuesday to $6,450.01, bringing the slide for the year to more than 50%. It's a huge downward slide from $19,511, a peak reached in December 2017 after a 1,400 percent surge as Bitcoin hit the mainstream.
While a lack of regulation has always drawn certain investors to cryptocurrency generally, this very feature has caused a number of issues, including market manipulation, money laundering, and outright theft. These problems have tarnished Bitcoin's public image and damaged investor confidence, causing the currency to lose value.
The most recent attack on the currency was the "cyber intrusion" on the South Korean crypto currency exchange CoinRail this past weekend, which resulted in a loss of an unknown quantity of digital currency. Bitcoin slumped 12% on Monday once the news broke.
Bitcoin's appeal has diminished further after reports that it manipulated prices back in 2017 during the height of the price surge using digital coin Tether. A research report by a University of Texas professor known for tracking suspicious activity in the VIX benchmark revealed that Tether, one of the most-traded cryptocurrencies, has a pattern of being spent on Bitcoin via the Bitfinex platform at critical moments, helping to propel Bitcoin to a record price in December. Bitfinex Chief Executive Officer JL van der Velde denied that Bitfinex or Tether ever engaged in market or price manipulation.
The crypto sector overall has been under increased government scrutiny since the Justice Department opened up a criminal probe into illegal trading practices that manipulated the price of Bitcoin and other crypto currencies. As analysts put it, "There doesn't seem to be as much hype, or positive news. Every time we get a negative news story now -- after a period of consolidation -- we don't see bullish sentiment come in to support it. It's almost as if people are waiting to sell it."
In the past 24 hours, a further $25 billion has been wiped off the total value of all crypto currencies, with Bitcoin leading the way. The total value of all crypto currencies dipped below $270 billion in late afternoon New York trading, the lowest level since April 11, as the crypto world sees no end in sight.
- https://www.bloomberg.com/news/articles/2018-06-12/bitcoin-drops-to-lowest-since-february-as-collapse-accelerates
- https://www.bloomberg.com/news/articles/2018-06-13/no-let-up-for-bitcoin-as-biggest-cryptocurrency-extends-decline?srnd=cryptocurriences
- https://www.marketwatch.com/story/bitcoin-hits-4-month-low-as-cryptocurrency-bloodbath-continues-2018-06-13
- https://www.bloomberg.com/news/articles/2018-06-13/professor-who-rang-vix-alarm-says-tether-used-to-boost-bitcoin
- https://www.fxleaders.com/news/2018/06/13/the-bitcoin-collapse-gains-momentum/