Bitcoin has just dropped below the $7,000 mark after the fifth straight day of losses, dragging down the value of other cryptocurrencies in the process. It is the first time since November, that bitcoin hits such low level.
The losses are caused by the governments’ clampdown on the cryptocurrency markets amid a speculative frenzy that pushed the value of the digital coins to artificial heights in late 2017.
Bitcoin’s value plunged 22% to $6,579 in New York on Monday. The drop wiped out around 65% of its value. In December, a single bitcoin sold for $19,511. On Monday, rival tokens also tanked, with Ethereum and Ripple losing around 21%.
Analysts underlined that no fundamental change led to the bitcoin’s price slump. But the artificial gains needed to be corrected at some point. Bitcoin’s crash was reportedly caused by a massive sell-off.
Bitcoin Hit with Negative Press
The incident was likely caused by negative news about the digital token. Lloyds Banking Group Plc and other financial institutions recently said that they would no longer allow their customers to purchase digital coins with their credit cards. Bank of American and JPMorgan soon joined the chorus. Several credit card issuers explained their decision through a desire to keep customers safe.
SEC boss Jay Clayton confirmed that the cryptocurrency issue needs to be clarified as current stock market rules were not designed with virtual coins in mind. Clayton appeared before the Senate Banking Committee on Tuesday to discuss the issue.
However, Bitcoin’s troubles are not caused only by negative press. Global stock markets are retreating after the Dow Jones reported the largest intraday point drop in its history on Monday. So, many investors abruptly decided to pull their money out of risky assets like cryptocurrencies.
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