Crypto market sheds $550bn as Bitcoin slides below $6,000

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LONDON: Over $ 550 billion of value has been wiped off the entire cryptocurrency market in just under a month. Bitcoin slid another 13 per cent to below $ 6,000 on Tuesday, bringing the world’s best-known cryptocurrency’s losses to more than half since the start of 2018.

Bitcoin has fallen heavily in recent sessions as worries about a regulatory clampdown on the nascent market and panicked investors push prices lower. The virtual currency hit a peak of almost $ 20,000 in December.

On the Luxembourg-based bitstamp exchange, bitcoin fell to as low as $ 5,920, its lowest level since mid-November, before recovering slightly. Other cryptocurrencies have also dropped sharply in value this week.

On January 7, the market capitalization or value of the entire cryptocurrency market hit an all-time high of $ 835.69 billion, according to Coinmarketcap.com, a website that takes into account the prices of over 1,000 digital coins across different exchanges. In early trade on Tuesday, the value of the cryptocurrency market had plunged to $ 278.53 billion, marking a more than $ 557.1 billion drop since the record high.

“We envisage this decline will continue, setting the next technical level at $ 5,000 a coin,” said Miles Eakers, the chief market analyst at Centtrip, which specialises in foreign exchange, worldwide payments and treasury management.

British bank Lloyds Banking said on Sunday it was banning customers from using credit cards to buy bitcoin. It joined US banking giants JPMorgan Chase & Co and Citigroup, which announced similar bans on concerns the lenders could be held liable when the volatile currencies plunge in value.

Bitcoin is still significantly higher on the year but down sharply since it recorded an all-time high of $ 19,783.21 in December.

Bitcoin’s market cap has fallen $ 233.5 billion since that record high.

Ethereum meanwhile, which hit an all-time high of $ 1,432.88 on January 13, traded around $ 577 on Tuesday, marking a near 60 per cent decline in a few weeks, according to Coinmarketcap.com data.

Third-largest cryptocurrency ripple is off more than 80 per cent from its record high of $ 3.81 it hit earlier this month.

Both ripple and ethereum are higher than a year ago.