Bitcoin dives below $US7,000

  • The price of bitcoin, the largest digital currency by market capitalisation, dipped below $US7,000 for the first time since November 15.
  • The cryptocurrency is down nearly 64% since hitting an all-time high above $US19,000 in December.

The bitcoin bear market has extended into new territory.

The cryptocurrency, which gripped the attention of the markets when it soared to almost $US20,000 a coin, was trading below $US7,000 on Monday for the first time since November 15, according to data from CoinMarketCap.

Bitcoin has had a rough start to 2018, hit by fears of a regulatory crackdown and slipping Asian volumes.

At last check, the digital currency was trading down 14.7% against the dollar at $US6,986 a coin, according to data from Markets Insider. That’s nearly a 64% decline from its all-time high set in late December.

Across the cryptocurrency market, digital currencies were trading in the red. The total market capitalisation of the crypto market declined by more than $US70 billion over the last 24-hours.

The bloodbath appears to be connected to a slew of announcements by numerous major banks that they will ban the use of their credit cards to buy bitcoin and other digital currencies. In the US, JPMorgan Chase, Bank of America, and Citigroup have announced bans, while Lloyds Bank is expected to do the same in the UK.

Aaron Lasher, the chief marketing officer of Breadwallet, a cryptocurrency wallet company which said it would allow customers to use credit cards to buy crypto on its platform on Monday, said such bans would be bad for crypto.

“In the short-term it would be very bad for the industry,” Lasher said. “It will make it very difficult for new comers to get into digital currencies.”

On top of the announced bans, confidence has also been dented by reports China is planning a ban on websites related to intial coin offerings and other forms of cryptocurrency trading.

“To prevent financial risks, China will step up measures to remove any onshore or offshore platforms related to virtual currency trading or ICOs,” an article in Financial News said, according to a report in the South China Morning Post.

More concerns emerged about the sector last week as Facebook banned cryptocurrency advertisements and US regulators began investigating Tether, a cryptocurrency that some fear has been used to inflate the value of bitcoin.

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