Bitcoin plunged 50% or half of its market value on Wednesday from its record high in December.
Traders and speculators were spooked by fears of a regulatory shut down, triggering a major sell off of the most valuable cryptocurrency. Bitcoin’s price per coin plunged 50 percent to $10,690 in late trading.
Dow Jones Record High
The Dow Jones Industrial on the New York Stock exchange closed with a record high of above 26,000.
Fears of a Shut Down in Trading by Governments
Fears that global regulators and governments would shut down digital currency exchanges, after South Korea announced that they were proposing a ban on cryptocurrency trading is seen as the cause in the sell-off of Bitcoin. Reports that the Chinese government is also weighing on banning cryptocurrency trading.
Warnings of a Bubble
Over the past several weeks there have been numerous warnings of a bubble from market watches. Bitcoin’s price rose nearly 1,400% last year, attracting a frenzy amongst traders and get rich quick speculators.
Senior market analyst at Oanda, Craig Erlam said that the bubble warnings in the recent weeks on the price of Bitcoin have proven to be savvy.
Questions whether Bitcoin will replace currencies like the dollar or if it will be just a speculative asset is now being asked by Market watchers.
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