The virtual coinage made a slight recovery following that, to stand a few hundred dollars over $6,000 at the time of writing, but the value dropping below that mark is telling because it meant that Bitcoin shed half its value since the beginning of the year.
And indeed it’s down to less than a third of the value it peaked at around the middle of December, when the currency was selling for about $19,500 (around £13,900, AU$24,800).
Just yesterday, Bitcoin stood at a tad under $8,000 (around £5,700, AU$10,200), so you can see just how rapidly fortunes can turn in the arena of virtual coins.
Bitcoin has now reverted to the value it stood at last October, and there is, of course, the potential for further damage. Go back just one more month to last September, and the digital coin’s value was about $4,000 (around £2,900, AU$5,100), so the bubble inflated quickly – and appears to be deflating at even greater speed.
The world of cryptocurrency is looking like a very rocky place at the moment, particularly when you consider that banks are now moving en masse to prevent customers from buying Bitcoin on credit cards. The fear is that folks are overextending themselves and borrowing to jump on the bandwagon, with potentially disastrous results.
As we saw yesterday, Lloyds Banking Group in the UK (Lloyds Bank, Bank of Scotland, Halifax and MBNA) enacted such a Bitcoin ban, and Virgin Money has now followed suit. Over in the US, JP Morgan, Bank of America and Citigroup have done the same across the board with cryptocurrencies, and we can likely expect this trend to continue.
Plus you can heap governmental pressure on top of that. Over in Asia, China has pretty much curtailed the majority of Bitcoin trading – and may eventually instigate a full ban, rumor has it – with India also reportedly taking steps to make cryptocurrencies illegal as a payment system.
Furthermore, there has been talk of greater regulation by authorities in the US, and as we saw at the end of last year, the UK government is already clamping down on cryptocurrency, regulating against its potential use for criminal activities like money-laundering or tax evasion.
With investors obviously spooked, and banks and governments reigning things in one way or another across the globe, it’s difficult to see anything other than downward pressure right now.
All that said, hints of another rally could see more bandwagon jumping, and you certainly can’t rule out another major upward spike for Bitcoin. Although people may now be looking towards other lesser cryptocurrencies as potential ‘penny stocks’ which could boom like Bitcoin. And, of course, bust like Bitcoin.