The top U.S. financial regulators on Tuesday told a Senate panel that they are studying cryptocurrencies and warned that unregulated exchanges pose significant risks to investors. Zachary Goelman reports.
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Corrections & Clarifications: An earlier version of this story incorrectly stated the year in which bitcoin hit its previous low.
What a difference a year can make. Last year at this time, bitcoin was in the middle of a 217-percent rally that saw its value peak in December near $20,000.
Now the largest cryptocurrency is struggling to stay above $4,000 – losing almost 28 percent in value this week and briefly hitting its lowest level since September 2017 at $3,477.58 in early Sunday trading, according to data from CoinDesk.
It bounced back to $4,029.42 in evening trading, up 5.4 percent from its 24-hour open. Other cryptocurrencies finally entered positive territory in late trading as well. Ethereum was up 3.7 percent from its 24-hour open, while Litecoin gained 7.9 percent. XRP edged up just under 1 percent, according to CoinDesk.
This week’s sell-off marked the largest one-week decline since April 2013 when bitcoin lost over 44 percent of its value, according to CoinDesk.
The cryptocurrency’s most recent troubles began in mid-November, when it dropped below $6,000. That was a turnaround from its relatively steady October when U.S. stocks got hammered.
Bitcoin enthusiasm has waned dramatically since the last holiday season. The cryptocurrency jumped from $6,088.35 in mid-November 2017 to $19,326.49 on Dec. 17, 2017. Year to date in 2018, bitcoin has declined almost 70 percent.
Cryptocurrencies in general are facing increased regulatory scrutiny, putting pressure on their values.
In mid-November, the Securities and Exchange Commission handed down its first civil penalties against a cryptocurrency company. Both CarrierEQ, which does business as Airfox, and Paragon Coin settled with the agency for registration violations as part of a wider SEC crackdown on fraud and abuse in the industry.
Citing three unnamed sources, Bloomberg News also reported last week that the U.S. Justice Department is investigating if market manipulation caused bitcoin’s 2017 rally.
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