Reasons for the decline
Matthew Frankel in an article a few hours ago explains some of the possible reasons for the sharp decline in bitcoin’s price a trend that is also shown in the top twenty altcoins all of which are also showing declines some in double digit percentages.
The dip in the bitcoin price followed by a drop in most other cryptocurrencies is now a multiday trend. Frankel notes that BTC lost 14 percent of its value over just the last 24 hour period and is down 23 percent on the week and was trading below the $10,000 level. Bitcoin-linked investments such as the Greyscale Bitcoin Trust were trading lower and by similar percentages.
Reasons for the continuing decline in bitcoin’s price
There is rising regulatory uncertainty in the US. This has been sparked in part by the negative response to Facebook’s plan to release the Libra cryptocurrency by several government officials who have spoken out against the dangers of cryptocurrencies.
Federal Reserve Chair Jerome Powell said: “Libra’s a new thing; we are looking at it very carefully. Given the possible scale of it, I think that our expectations — from a consumer protection standpoint, from a regulatory standpoint — are going to be very, very high. […] Authority for overseeing Libra is going to be in several places, but I think that the big picture is we are going to be looking really carefully at it.” ”
Bloomberg also argues that Trump’s criticism of bitcoin and other cryptocurrencies had a negative effect on prices: “The tumble comes days after U.S. President Donald Trump criticized digital coins on the heels of this year’s stellar rally. Trump wrote on Twitter on Thursday that he is “not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air,” adding that “Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity.””
Senate hearing on cryptocurrencies also a factor
There is an ongoing hearing in the US Senate on the safety and legitimacy of cryptocurrencies. There are both Democratic and Republican critics of cryptocurrencies. It is not just Trump and his administration who are critics but Democrats as well. As an example Senator Sherrod Brown an Ohio Democrat complained that “we would be crazy to give them a chance to experiment with people’s bank accounts, to use powerful tools they don’t understand like monetary policy to jeopardize hardworking Americans’ ability to provide for their family.” While it is not clear what will come of these hearings, investors are jittery and dislike the regulatory uncertainty being generated.
Present situation
24 hours ago bitcoin (BTC) was trading at $11,068 according to CoinDesk data . Since then its high only reached $11,075 whereas it has plunged as low as $9,360. Even at 18:10 Central Daylight Time it was still only at $9,411 not much off its low. It was down about 15 percent from its open or $1,637 even worse than when Frankel wrote his article.
The top twenty altcoins are also down, quite a few of them in double digit percentages. The present price of bitcoin and the top twenty altcoins can be found here.
