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Spooked investors are selling their cryptocurrency as value tumbles.
Has bitcoin’s bubble burst?
At the time of writing (17 January), bitcoin’s value had plunged to $10,811, a drop of around 46pc (compared to a high of $19,500 in December).
Fears of a regulatory crackdown have sent cryptocurrencies tumbling as investors rush to sell their coin.
According to CoinMarketCap, cryptocurrency trading has seen bitcoin fall 10.45pc overnight, Ethereum fall 11.6pc, Ripple fall 16.8pc, bitcoin cash fall 10.5pc and Cardano fall 13.6pc.
Out of the myriad of cryptocurrencies out there, some of the biggest falls include NEO by 20pc, and Qtum by 19pc.
Did bitcoin fly too close to the sun?
Reports of regulatory crackdowns are nothing new. So, why are investors suddenly getting cold feet?
The plunge in cryptocurrency value was driven by reports that South Korea and China could ban trading of cryptocurrencies such as bitcoin, leading to fears of a wider regulatory crackdown worldwide. China recently instigated its crackdown, beginning with the ceasing of all ICOs. This followed hot on the heels of similar moves by financial authorities in Singapore and South Korea.
And what could be the financial impact if the cryptocurrency goose is cooked? According to Coinbase, so far, more than $50bn worth of digital currency has been exchanged worldwide by 10m people in 32 countries.
It is too early to say if the bitcoin bubble has burst, and if it and other cryptocurrencies could yet rally, but the chances are that the dizzy heights of December no longer look so gilded in the cold light of the dawn of 2018.
Cryptocurrencies represent a marvel of our digital age, but could distract from the greater gains to be reaped from a myriad of more practical uses of the blockchain technology on which they are based.
