The top U.S. financial regulators on Tuesday told a Senate panel that they are studying cryptocurrencies and warned that unregulated exchanges pose significant risks to investors. Zachary Goelman reports. Video provided by Reuters Newslook
What a difference a year can make. Last year at this time, bitcoin was in the middle of a 217-percent rally that saw its value peak in December near $20,000.
Now the largest cryptocurrency can’t stay above $4,000 – losing almost 35 percent in value this week and hitting its lowest level since September 2007 at $3,477.58 on Sunday, according to data from CoinDesk.
It bounced back to $3,661.95 in midday trading Sunday, but is still down 12.8 percent from its 24-hour open. Other cryptocurrencies also languished. XRP fell 15 percent from its 24-hour open, while Ethereum and Litecoin were both down by more than 12 percent, according to CoinDesk.
This week’s sell-off marked the largest one-week decline since April 2013 when bitcoin lost over 44 percent of its value, according to CoinDesk.
The cryptocurrency’s most recent troubles began in mid-November, when it dropped below $6,000. That was a turnaround from its relatively steady October when U.S. stocks got hammered.
Bitcoin enthusiasm has waned dramatically since the last holiday season. The cryptocurrency jumped from $6,088.35 in mid-November 2017 to $19,326.49 on Dec. 17, 2017. Year to date in 2018, bitcoin has declined more than 72 percent.
Cryptocurrencies in general are facing increased regulatory scrutiny, putting pressure on their values.
In mid-November, the Securities and Exchange Commission handed down its first civil penalties against a cryptocurrency company. Both CarrierEQ, which does business as Airfox, and Paragon Coin settled with the agency for registration violations as part of a wider SEC crackdown on fraud and abuse in the industry.
Citing three unnamed sources, Bloomberg News also reported last week that the U.S. Justice Department is investigating if market manipulation caused bitcoin’s 2017 rally.
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