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Bitcoin Plummets In Value As Countries Crack Down On Cryptocurrencies

Bitcoin Plummets In Value As Countries Crack Down On Cryptocurrencies

If you're a late investor to Bitcoin, it might be worth looking away now as the value of the currency has undergone a huge plunge over the past week.

Yesterday the world's most popular cryptocurrency lost almost half of its peak value from a month ago, trading at under $10,000 (£7,229) - its lowest value since 27 November last year, according to Coinbase.

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Although the value of Bitcoin has now picked up slightly, it's still a stark crash considering it hit its peak price of over $19,000 (£13,700) in mid-December - and has basically scratched off all the gains the cryptocurrency made. Ouch.

Credit: PA
Credit: PA

Bitcoin's big dip has been matched by rapid downturns in Ethereum and Ripple, the second and third-biggest crytocurrencies. Ethereum was trading as low as $823 (£594), down 38 percent in a week, while Ripple lost over half its value in a week.

Speculation has grown that the plunge across the board is down to growing regulations on cryptocurrencies in countries across the world. There are even fears that governments might shut the notoriously volatile digital assets down.

Countries considering a crackdown on cryptocurrencies include China, Japan and South Korea, whose finance minister Kim Dong-yeon confirmed that they were considering shutting down domestic exchanges.

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The chief of South Korea's Financial Services Commission said: "(The government) is considering both shutting down all local virtual currency exchanges or just the ones who have been violating the law."

Credit: PA
Credit: PA

South Korea's backlash against bitcoin will come as a worry to bitcoin traders as the country is one of the currency's biggest markets. However, such a move has been in the making for a while, as fears grow that the currency encourages speculation and crime.

Just before the New Year, the Korean government said it planned to bar banks from offering anonymous Bitcoin accounts, requiring transactions to name participants.

The government also hinted at new laws to allow officials to close some exchanges of the currency if they felt there was a need to do so.

"Cryptocurrency speculation has been irrationally overheated in Korea," the South Korean government said in a statement reported by Bloomberg News. "The government can't leave the abnormal situation of speculation any longer."

Even before this latest round of considerations South Korea had already banned initial coin offerings and barred local finance firms from handling bitcoin futures.

Just last week, billionaire investor Warren Buffett warned with 'almost certainty' that cryptocurrencies 'will come to a bad ending'. Might that ending come sooner than we think?

Featured Image Credit: PA

Topics: Bitcoin, World News, Business, South Korea, Money, Cryptocurrency, Technology

Chris Ogden

Chris Ogden is a journalist at LADbible. He graduated from the University of East Anglia with degrees in English Literature and Creative Writing before completing his NCTJ Diploma in Multimedia Journalism. Chris has previously written for the independent culture magazine The Skinny, among other publications.

 

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