For the first time in three months - since mid-November last year - Bitcoin fell to USD 6,190 today. The virtual currency saw an unprecedented and meteoric 26-fold rise last year before falling by a very sharp 20 per cent. This crash comes six weeks after Bitcoin hit USD 19,511. However, as mentioned in reports, there were warnings that the cryptocurrency would fall by another 50 per cent.
Across the globe, Bitcoin has faced severe crackdowns by governments. On February 1, the Indian Finance Minister, Arun Jaitley, said during his Budget 2018 speech that the government would take all measures to eliminate its use in the payment system. "The Government does not consider crypto-currencies legal tender or coin and will take all measures to eliminate use of these crypto-assets in financing illegitimate activities or as part of the payment system," he said.
Before this salvo by Mr Jaitley, there were crackdowns in China, South Korea that is one of its biggest markets and Russia. In Japan too, authorities raided an exchange after it lost 530 million to hackers.
Greg McKenna, chief market strategist at AxiTrader said, "The risk-off tone is hitting Bitcoin almost as hard as a global regulator and bank scrutiny. The latest dent to the Cryptospace has been banks saying they are shutting down the ability of clients to buy Bitcoin with their cards."
"This could end up a full round trip back into the 1,850/ 2,966 region," he said.
Central banks in Europe, US and Japan have expressed concerns about Bitcoin. On top of that JP Morgan Chase, Citigroup, Lloyds Banking Group and Bank of America also announced their decision to ban cryptocurrency purchases by their credit card holders.
American economist Nouriel Roubini called it 'the biggest bubble in human history'. Even Warren Buffet called it a bubble in October last year. He said, "You can't value Bitcoin because it's not a value-producing asset. It's a mirage basically".
(With agency inputs)
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