Bitcoin steadies from 26pc slump as traders brave volatility

Andrew Cummings
January 18, 2018

Regulators across the globe, in countries including China, India, Brazil and South Korea, have been warning investors about the risks of trading in cryptocurrencies. Bitcoin was trading at $12,615.60, down 7.1 per cent from the day before as of 8.03am GMT, according to Coindesk.

"The government stance is that it needs to regulate crypto-currency investment as it is a largely speculative investment", its finance minister Kim Dong-yeon said in a radio interview on Tuesday.

However, it played into fears raised in the press in the past week over impending crackdowns in South Korea and China.

Bitcoin users in India have been facing difficulties with deposits and withdrawals after the country's banks blocked all crypto-trading.

Justice Minister Park Sang-ki told news reporters last week that the justice ministry is "basically preparing a bill to ban cryptocurrency trading through exchanges".

Owners of bitcoin, ethereum, and other cryptocurrencies are probably not too happy right now, with nothing but bleak news for crypto holders these past few days.

Iqbai Gandham, managing director of eToro in the United Kingdom said in an email:"The market is correcting off the back of news that China is moving to crack down on cryptocurrency trading".

The $10,000 milestone is 50 percent below the $20,000 peak that bitcoin touched just one month ago. A Chinese state-run newspaper Securities Times reported on Tuesday that Beijing will target over-the-counter trading, offshore sites used for centralized trading, and peer-to-peer trading of large transactions.

The problem with this assessment is that the reason behind Bitcoin's price correction in 2014 has little in common with the current environment. On the week, Bitcoin's has lost almost a third of its value, hitting its lowest level since November of a year ago.

Mati Greenspan, senior market analyst for eToro, said low trading in Korea and Japan may have contributed to the price movement. In the US, the Securities and Exchange Commission asked at least 15 funds to pull applications this month for bitcoin-related exchange-traded funds. There has been strong support for cryptocoins in Asia up to now.

"These prices go up and they go down as well and there are two ways to frame this". At some point in the decline, investors may decide that it is time to buy back in to the market.

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