Bitcoin slides below US$10,000 amid clampdown fears

Bitcoin skidded below US$10,000 (RM39,500) yesterday, halving in value from its peak price, with investors gripped by fears regulators could clamp down on the volatile cryptocurrency that sky-rocketed last year.

The price of bitcoin, the world’s biggest and best known cryptocurrency, fell to as low as US$9,500 on the Luxembourg-based Bitstamp exchange, the lowest since Dec 1.

Bitcoin touched a peak of almost US$20,000 in December – and indeed crossed over that threshold on some exchanges – but has since been roiled by several large sell-offs.

Other cryptocurrencies plunged as well. Ethereum and ripple were both down heavily after reports South Korea and China could ban cryptocurrency trading, sparking worries of a wider regulatory crackdown.

“There is a lot of panic in the market. People are selling to try and get the hell out of there,” said Charles Hayter, founder of Cryptocompare, which owns cryptocurrencies.

“You have more regulatory uncertainty … and because of these falls you have these other outfalls,” he said, referring to the collapse of some cryptocurrencies in the recent slump in prices.

With South Korea, Japan and China all making noises about a regulatory swoop, and officials in France and the United States vowing to investigate cryptocurrencies, there are concerns that global coordination on how to regulate them will accelerate.

Officials are expected to debate the rise of bitcoin at the upcoming Group of 20 (G20) summit in Argentina in March.

“Cryptocurrencies could be capped in the current quarter ahead of the G20 meeting in March, where policymakers could discuss tighter regulations,” said Shuhei Fujise, chief analyst at Alt Design.

Analysts at Citi said today bitcoin could halve again in value amid the current rout, adding that a possible fall to between the US$5,605 and US$5,673 area “looks very likely to be very speedy”.

“Bitcoin is deciding whether this is the moment to crash and burn,” said Steven Englander, head of strategy at New York-based Rafiki Capital.

“My conjecture is that cryptocurrency holders are trying to decide whether to abandon bitcoin because its limitations mean it will be superseded by better products or bet that it can thrive despite them.”