Wed, Feb 07, 2018 - Page 10 News List

Bitcoin below US$6,000 first time in three months


Bitcoin yesterday plunged more than 20 percent to fall below US$6,000, its latest sharp loss following a series of setbacks, with a global stock market collapse fueling the selling.

The virtual currency fell to US$5,992 for the first time since the middle of November last year, according to Bloomberg News, the latest hammering for the cryptocurrency that saw a stratospheric 26-fold rise last year.

Yesterday’s collapse comes just six weeks after bitcoin hit a record high of US$19,511, fueled by a flood of speculators looking to make a quick buck.

Since those heady days the cryptomarket — which includes dozens of other units — has been pounded by news of crackdowns by governments, including in China, Russia and South Korea, one of the biggest markets for the sector.

On Thursday last week, India said it would “take all measures to eliminate” cryptocurrencies’ use as part of a payment system and in funding illegitimate activities, while Japanese authorities raided a virtual currency exchange after it lost US$530 million to hackers.

Central banks in Europe, Japan and the US have also flagged concerns about the unit.

This week, several commercial lenders said they would stop allowing their customers to buy bitcoin through their credit cards owing to debt concerns.

“The dynamics behind the moves are regulatory clampdowns and investors losing confidence in crypto,” said Stephen Innes, head of trading for Asia-Pacific at Oanda Corp.

The sell-off yesterday was exacerbated by crushing losses on world stock markets, with the Dow Jones Industrial Average on Wall Street suffering its biggest one-day points loss and wiping out all its gains for this year.

Panicked investors are fretting over rising US borrowing costs, leading them to cash in profits after a stellar couple of months that have seen many indices hitting record or all-time highs.

Equities have enjoyed months of surges fueled by optimism over the US economy, corporate earnings and the global outlook.

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