Cryptocurrency prices steady with ripple bouncing back 30% after 'severe' sell-off

Image Source CoinMarketCap

The price of the world's biggest and best-known cryptocurrency fell to as low as $10,065 on the Luxembourg-based Bitstamp exchange, a six-week low and close to half the peak price of nearly $20,000 it reached in December.

Tokyo/London - Bitcoin plunged more than 11% on Wednesday, extending a precipitous downturn in fortunes, with investors spooked by fears regulators might clamp down on an asset the value of which skyrocketed in the past year.

His comments came after the world's most popular virtual currency, bitcoin, slid 18 per cent on Wednesday on reports suggesting South Korea could ban trading of cryptocurrencies.

Citigroup analysts wrote in a research note Wednesday that bitcoin could halve again in value from current levels.

With South Korea, Japan and China all making noises about a regulatory crackdown, and officials in France and the United States vowing to investigate cryptocurrencies, there are fears that authorities may launch some coordinated action in relation to the units. That's why the rise and fall in the value of Bitcoin, is quite obvious. That means early investors in bitcoin would still be seeing gains; late investors would have experienced significant losses. The option of completely banning the cryptocurrency trading is still open, the South Korean minister said in an interview.

"Bitcoin is deciding whether this is the moment to crash and burn", Steven Englander, head of strategy at Rafiki Capital Management, told Reuters on Tuesday.

Thomas Bertani, CEO of Eidoo, said: "The hypothesis of South Korea banning cryptocurrencies, more than a driving factor, is really just an excuse for the market to rest down for a little bit before continuing with its growth".

"Japan and South Korea usually dominate this market but over the last few days, the volumes have been dropping steadily".

Whatever the reason, Bitcoin remains relatively strong, suffering less from the major dip than other coins.

It all started at around 7am GMT on Tuesday, when the total market capitalization or value of every digital coin stood at $653.8 billion, according to data from Coinmarketcap.com, a website that tracks the price of cryptocurrencies by taking into account the prices across different exchanges. Bad news often travels in pairs, and Bitcoin is no different, with Bloomberg already pointing that on the heels of local crypto exchanges being pulled, Chinese authorities were likewise continuing to squeeze the ecosystem: residents are set to be blocked from bitcoin trades as far as foreign exchanges are concerned.

"The run-up in bitcoin created a mystique of one-way trading which is being shaken, but the pricing requires faith that there will always be demand", Englander wrote.

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