Bitcoin fell as much as 20 percent on Wednesday, January 17,piercing below $10,000, while other cryptocurrencies took similar spills due to investor fears that regulators could clamp down on them in an effort to curb speculation.
Bitcoin, despite some stabilization in late U.S. trading, was half its record peak of almost $20,000 set on the Luxembourg-based Bitstamp exchange BTC=BTSP a month ago.
Charles Hayter, founder of Cryptocompare, which owns cryptocurrencies said,“There is a lot of panic in the market. People are selling to try and get the hell out of there. You have more regulatory uncertainty ... and because of these falls, you have these other fallouts.”
Analysts at Citi said on Wednesday bitcoin could halve again in value amid the current rout, adding that a possible fall to a range between $5,605 and $5,673 “looks very likely to be very speedy”.
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 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.
While many observers say the recent falls show that the bubble has burst, those backing the nascent markets say that regulation is welcomed and wild price swings to be expected.
