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Bitcoin sinks 20 percent as cryptocurrencies plummet

Posted: 8:08 AM, Jan 16, 2018
Updated: 2018-01-16 09:15:03-05
Bitcoin sinks 20 percent as cryptocurrencies plummet

Bitcoin tumbled as much as 20 percent Tuesday.

The price of the volatile digital currency dipped below $12,000, its lowest level in more than a month, according to data from CoinDesk.com .

Other popular cryptocurrencies ethereum and ripple also posted double-digit losses.

 

It's unclear why bitcoin fell. Cryptocurrency is a murky market with frequent swings.

"Volatility is quite common in the cryptocurrency world," said Mati Greenspan, a Tel Aviv-based analyst at investment firm eToro.

The plunge follows a Bloomberg report on Monday that Chinese officials were stepping-up measures to limit cryptocurrency trading, which is already banned on exchanges.

Investors in South Korea and Japan, the two largest cryptocurrency trading nations, were sitting on the sidelines Tuesday waiting for the regulatory uncertainty to clear before placing further bets, said Greenspan. He believes the light trading volume caused bitcoin's price to plunge.

Bitcoin approached a record $20,000 in mid-December as it launched on futures exchanges in the United States. But it has since fallen sharply on intense regulatory scrutiny.

Trading is booming in South Korea, but officials began clamping down late last month .

South Korea banned opening anonymous virtual currency accounts and put in place new laws giving authorities power to shut down digital currency exchanges. Officials are currently weighing halting trading on exchanges.