Fears grew of a regulatory crackdown has forced the Bitcoin to slid as much as 14 per cent on Tuesday to hit a four-week low below $12,000. The fear was fuelled with reports that South Korea was planning to ban trading in cryptocurrencies.
South Korean news website Yonhap reported that Finance Minister Kim Dong-yeon had told a local radio station that the government would be coming up with a set of measures to clamp down on the “irrational” cryptocurrency investment craze.
Bitcoin slid on the news, trading as low as $11,730 on the Luxembourg-based Bitstamp exchange, down 13.6 percent on the day, Reuters report.
The latest tumble leaves bitcoin more than 40 per cent down from the record highs of around $20,000 reached in mid-December, wiping about $125 billion from its “market cap” – the price of bitcoin multiplied by the total number of bitcoins that have been “mined”, or released into the market.
In spite of its dizzying rise, Bitcoin is not the most lucrative cryptocurrency in a universe that counts 1,400 rivals.
According to report bitcoin is not even in the top 10 of the crypto world’s best performers.
The reports also that financiers have also warned the public against crypto.
Top of the heap of crypto is Ripple which posted a jaw-dropping 36,000 per cent rise in 2017.
Ripple early this year broke through the 100-billion euro capitalisation mark, matching the value of blue-chip companies such as, say, global cosmetics giant L’Oreal.
“Its value shot up when a newspaper said that around 100 financial institutions were going to adopt their system,” said Alexandre Stachtchenko, co-founder of specialist consulting group Blockchain Partners.
Using Ripple’s technology framework, however, is not the same as adopting the currency itself, and so the Ripple’s rise should be considered as “purely speculative”, according to Alexandre David, founder of sector specialist Eureka Certification.
Others point out that Ripple’s market penetration is paper-thin as only 15 people hold between 60 and 80 per cent of existing Ripples, among them co-founder Chris Larsen.
But it still got him a moment of fame when, according to Forbes magazine, Larsen briefly stole Facebook founder Mark Zuckerberg’s spot as the fifth-wealthiest person in the US at the start of the year.
Ether is another rising star, based on the Ethereum protocol created in 2009 by a 19-year old programmer and seen by some specialists as a promising approach.