- Prices are trading below $US8,000 and have fallen through key technical support.
- Ethereum has also fallen to a 2018 low as major alt-coins are sold off.
- The ban by Google on all cryptocurrency advertising follows similar steps by Facebook.
Bitcoin slumped below $US8,000 this afternoon in Asian trade, after an overnight selloff in the wake of a Google advertising ban.
Google announced that it will remove advertising for all cryptocurrencies — including bitcoin and new initial coin offerings (ICOs) — effective from June.
The selling has hit other major alt-coins, with Ethereum falling to a 2018 low at less than $US600.
It’s been a rough week for the sector, with the bearish bias driven by increased regulatory scrutiny.
There’s been warnings from regulators and rumours of exchange hacks as the new sector attempts to build legitimacy, after hype built to a fever pitch in December when bitcoin’s value almost reached $US20,000.
Prices then slumped to below $US6,000 in early February, coinciding with a wave of panic across traditional asset classes about the prospect of rising interest rates.
Since then, bitcoin’s value stabilised and traded in a relatively narrow range — by crypto standards — between $US10-$12,000 for most of the last month before the latest falls.
Yesterday, one of the world’s biggest cryptocurrency exchanges submitted a written testimony to US Congress asking for clarity on the regulatory treatment of the new asset class.
Coinbase, which can’t trade in shares, has around 20 million users — more than the number of bitcoins currently in circulation — and argues that digital currencies should be treated separately from securities.
At current prices, bitcoin has now fallen well below the $US8,465 level that Daily FX strategist Ilya Spivak said represents key technical support.
But it may have further to fall if Allianz Global Investors are proved correct. The investment arm of Europe’s biggest insurer argued overnight that bitcoin’s intrinsic value is zero.
While Allianz isn’t the first institutional investor to weigh in on the bitcoin debate, the crypto value proposition is currently being tested by the increased regulatory oversight.