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2 Feb, 2018 08:12

Bitcoin train goes off the rails, plunging below $8,000

Bitcoin train goes off the rails, plunging below $8,000

Top digital currency bitcoin dropped more than 17 percent on Friday, losing over half of its value since January, representing more than $72 billion.

The cryptocurrency was trading at $7,796 as of 12:50pm GMT, according to CoinMarketCap data. Bitcoin has now lost 60 percent since hitting a record price of $20,000 in mid-December.

The decline followed reports on increased regulation in India and potential price manipulation at a major exchange. India’s Finance Ministry declared on Thursday that cryptocurrencies are illegal in the country and the government fully intends to stamp out their use.

Facebook's announcement that it would ban all ads for cryptocurrencies and ICO's, as well as reports that two major exchanges, Bitfinex and Tether, had been investigated by the US regulators, also helped to spook the cryptocurrency market this week.

“Lots of news regarding regulation is causing the market to panic,” a quantitative developer and data scientist at Cypher Capital, Nick Kirk, told CNBC.

All the leading cryptocurrencies except two were trading lower on Friday.

Ethereum was the only major coin to finish January on a positive note. The second-largest cryptocurrency saw gains of 45 percent during 2018’s first month, compared to a loss of 25 percent for bitcoin, and respective declines of 45 percent and 35 percent for ripple and bitcoin cash.

“The state of cryptocurrency is incredibly strong,” Andy Bromberg, CEO of CoinList, an ICO hosting platform, told Business Insider. “Looking far beyond the prices, we're seeing an increasing number of high-quality projects in the space, with experienced teams, impressive early technological breakthroughs, and rigorous legal structuring.”

According to Kirk, ethereum will outperform bitcoin “by a country mile.”

“We think the war between bitcoin and bitcoin cash is having a negative effect on bitcoin sentiment,” he said.

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