Bitcoin has taken another beating recently, as the value of the virtual currency experienced a sharp drop for two days in a row, dropping below $10,000. Although Wednesday morning bitcoin was able to experience a slight rebound, it traded as low as $9,958 on the same day.
As of 2:10pm GMT today, Reuters and Bloomberg have reported another drop below $10,000, with the cryptocurrency currently sitting at $9,626.
The troubling fall is part of a larger decline in the value of bitcoin that started with its initial decline in mid-December. At the time it had been trading at roughly $20,000. The currency had already fallen to a value of $10,200 on Tuesday on the Bitstamp exchange, this representing a 25 percent loss of its value on the Asian markets.
No doubt this fall of Bitcoin and competing cryptocurrencies like Ethereum and Ripple has been largely influenced by a combination of factors, including the instability of some trading platforms as well as increasing government pressure, most of which is backed by their concerns that bitcoin’s rise in 2017 would trigger a speculative bubble and trading frenzy that could result in losses for millions of traders globally.
Government Opposition to Bitcoin Continues to Grow
One of the most recent telltale signs about the government’s position on bitcoin trading platforms came in the form of news about BitConnect on Tuesday evening that it would close its exchange and lending in light of growing pressure from regulators. The UK Registrar of Companies had submitted a stern warning to the company in early November 2017 that “unless cause is shown to the contrary, at the expiration of 2 months from the above date [November 7, 2017],” the company would be forcibly dissolved, adding in the document, “Upon dissolution all property and rights vested in, or held in trust for, the company are deemed to be bona vacantia, and accordingly will belong to the crown.”
Adding to the worries were the irregular updates issued by BitConnect via Twitter in the past few days. First, they came in the form of a notice about a routine service disruption.
@bitconnect .co website is currently down due to server issues. We apologize for the inconvenience— BitConnect (@bitconnect) January 13, 2018
A few hours later, however, the updates began to center around warning users of Distributed Denial of Service (DDoS) cyber attacks, which continued for 48 hours.
The website is under control from the attack and we have enabled the website and dashboard. At the moment you can not perform exchange activities. The exchange will take another 24 hours to work as usual. Withdrawals from wallets will be restored as soon as possible.@bitconnect— BitConnect (@bitconnect) January 15, 2018
Francis Pouliot, CEO and founder of the bitcoin platform Satoshi Portal, took to Twitter to offer his support to those who the BitConnect users who seemed to watch their savings vanish into thin air in a matter of hours.
These are actual digital gravestones of Bitconnect bagholders having their savings evaporate before their eyes.— Francis Pouliot (@francispouliot_) January 17, 2018
The bitconnect subreddit is a cemetery. R.I.P. 💀
There will be more in many different subreddits. pic.twitter.com/l9yfuZq9q8
Given that the majority of governments that have shown the strongest (though arguably in the US we have witnessed the most outspoken) opposition to bitcoin have been in East Asia, with South Korea pursuing some of the most aggressive controls, this development from the UK is significant.
On the one hand, one could easily make the argument that the government is merely enacting some sort of power-posturing game, unable to embrace a new and imminent economic reality—couched in its frequent mentions that they are merely acting in the best interest of the public. On the other hand, however, there have been some significant red flags, in terms of their ability to provide adequate security, seen in several trading platforms. Amidst the uncertain future of the bitcoin, the phrase “informed consumer” has become more important than ever. We will continue to follow these developments.