Bitcoin is falling

  • Bitcoin’s price dropped sharply on Wednesday, at one point falling below $US17,000 a coin.
  • The drop comes one day after one of the largest cryptocurrency trading platforms, Coinbase, launched and then suspended trading in bitcoin cash, a spinoff of bitcoin.
  • Total cryptocurrency market capitalisation has passed $US600 billion.

LONDON – The price of bitcoin has dropped sharply during European trading early Wednesday following a series of troubling developments for the cryptocurrency in recent days.

According to data from Markets Insider, the price of bitcoin had dropped below $US17,000 a coin but has since recovered some ground. It remains significantly lower, though, with losses of roughly 3% around 9.10 a.m. GMT (4.10 a.m. ET):

Screen Shot 2017 12 20 at 09.08.01Markets Insider

Coinbase, one of the largest cryptocurrency trading platforms, on Tuesday started allowing users to trade bitcoin cash, a spinoff of bitcoin that launched earlier this year.

Just hours later, however, the site suspended trading after bitcoin cash’s price spiked, prompting concerns about possible insider trading by people who had been briefed about the announcement.

“Given the price increase in the hours leading up the announcement, we will be conducting an investigation into this matter,” Coinbase’s CEO, Brian Armstrong, said in a blog post. “If we find evidence of any employee or contractor violating our policies – directly or indirectly – I will not hesitate to terminate the employee immediately and take appropriate legal action.”

Compounding the day of bad news in the crypto world, a South Korean exchange on Tuesday said it was shutting down and filing for bankruptcy after being hacked for the second time this year, highlighting concerns about security as trade in bitcoin and other virtual currencies boom.

The exchange, Youbit, announced on its website that it had been hacked at 4.35 a.m. local time on Tuesday and lost 17% of its total assets.

On Wednesday, a group of Australian researchers published a study that found almost half of all transactions in bitcoin were associated with buying and selling illegal goods and services, including drugs, weapons, and pirated software.

Using techniques usually associated with forensic accounting, the group of researchers – led by Talis Putnins, a professor at the University of Technology Sydney – found that the blockchain technology underpinning bitcoin held significant promise for revolutionising many industries.

“But this sort of illegal activity risks stunting the adoption of this technology and limiting the potential benefits to society,” Putnins said, according to Business Insider Australia.

Despite these developments, according to CoinMarketCap.com, the total global market capitalisation of cryptocurrencies has passed $US600 billion.

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