Bitcoin fell below $10,000 Wednesday, extending a sell-off that has erased about half the digital currency’s value in one month. Other digital currencies fell sharply as well.
Bitcoin has slumped about 30 percent just this week as traders worry that regulators in South Korea will crack down on trading of digital currencies. The price of bitcoin fell 13 percent to $9,823 as of 1:26 p.m. Eastern Time, according to Coindesk.
Bitcoin hasn’t caught on as a currency for buying things, as intended. But it has drawn huge interest from traders, and its price has soared over the past year, and has also had several sharp drops.
The price of one bitcoin went from $1,000 at the beginning of last year to nearly $20,000 in December, and has lost about half its value in the last month. The latest plunge brings the price back to where it was in late November.
Many financial pros believe bitcoin is in a speculative bubble that could crash any time.
The possibility that South Korea will ban or restrict virtual currency trading has weighed on traders’ minds the last few weeks because the nation is a major market for currencies like bitcoin.
Those worries have also depressed the prices of other digital currencies that gained sharply in recent months.
Ethereum fell 17 percent Wednesday to $867, according to Coindesk. That is still roughly double where it was in November, and down sharply from its recent peak of $1,329 on Jan. 10.-->
Bitcoin and other digital currencies trade on private exchanges that have little regulation or protection for investors. In December two major financial exchanges, the Cboe and CME, started trading in bitcoin futures, which allow investors to make bets on the future price of bitcoin without actually holding bitcoins.
Bitcoin futures on both the Cboe and the CME fell about 10 percent Wednesday and hit their lowest levels since trading began last month.
Bitcoin is extremely hard to value because it has no country or central bank backing it and it’s not widely used to make transactions. Its value is tied only to what people believe it is worth at any given time.
Partly for that reason, it’s gone through numerous highs and lows in its brief history since being formed in 2009: After a plunge in November 2013, it lost about half its value in 2014. The huge rally in 2017 also came with some sharp selloffs, although those wound up being temporary.