The Bitcoin cryptocurrency tumbled below the $8 thousand mark for the first time since November last year, a likely symptom of a potential bubble burst.
Ever since the cryptocurrency reached a record high of $19.511 on December 18 shortly after the introduction of bitcoin futures contracts in the US, Bitcoin was hit with wave after wave of negative news. Such setbacks include rising regulatory threats from around the world including South, Korea, China, India, and the US, Facebook’s ban on cryptocurrency ads and a $500 million theft at Japanese exchange Coincheck Inc. All these setbacks together have caused the cryptocurrency to lose more than a half of its value in just one month.
Nouriel Roubini, chairman of Roubini Macro Associates, and the man responsible for predicting the 2008 economic crash has called the bitcoin bubble “the mother of all bubbles”
“Now bitcoin crashing below 8000, headed towards 7000. Down 60% from the peak, 40% in a month, and over 10% today,” he wrote in a Twitter post.
Japanese authorities raided Coincheck’s offices Friday morning, a week after the $500 million heist, taking hold of documents and computers as evidence. The inspection was reportedly conducted to ensure user’s security, according to Finance Minister Taro Aso.
Bitcoin is arguably the largest and most popular cryptocurrency on the market. Its sudden drop spells disaster for the entirety of the digital currency market. The currency dropped 16 percent to $7.643 in New York. Other cryptocurrencies such as Ripple, Litecoin, and Ether have also fallen an estimated 18 percent.
Roubini, who is an outspoken bitcoin critic, said in an interview that regulators have “fallen asleep at the wheel” when it comes to regulating digital currencies. One of his main points of criticism was the lack of attention to initial coin offerings, an unregulated means of gaining capital for startups. The ICOs have been a target for many hackers due to their low-level security.
More so, Roubini said that regulators have done little to address the obvious fraud and manipulation in the cryptocurrency market.
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