Bitcoin, the decentralized digital currency, fell more than 15 percent on Monday to a nearly three-month low as major British and US banks including Bank of America, J.P. Morgan, Citigroup, Capital One, Discover, and Lloyds plan to put a restriction on the usage of credit cards to buy Bitcoins.
Bitcoin fell to roughly $6,853.53 on the Luxembourg-based Bitstamp exchange, in the afternoon trading in New York marking a fall of more than half from a peak of almost $20,000 hit in December. After falling in six of the eight trading sessions, Bitcoin has lost about half of its value so far due to the regulatory crackdown by governments and banks. Last week Bitcoin suffered its worst weekly performance since 2013. “We envisage this decline will continue, setting the next technical level at $5,000 a coin”, said Miles Eakers, chief market analyst at Centtrip, which specializes in foreign exchange, worldwide payments and treasury management.
Other cryptocurrencies like Ethereum and Ripple too are seeing huge declines on Monday, according to industry tracker Coinmarketcap.com. Ethereum declined by nearly 19 percent at $703.40, while Ripple last traded at 71 cents, down 14.1 percent. Craig Erlam, analyst at currency broker Oanda, said, “Cryptocurrencies have seriously fallen out of favour since the middle of December, and constant negative news flow and speculation of increased regulation has exacerbated the move lower.”
After the news of hacks and scams, investors should remain cautious about investing in cryptocurrencies according to the remarks by SEC Chairman, Jay Clayton.