Bitcoin set for worst weekly slide since 2015 as scrutiny rises

Bitcoin is on track for a 22 per cent slide this week.
Bitcoin is on track for a 22 per cent slide this week.PHOTO: REUTERS

HONG KONG (BLOOMBERG) - Bitcoin slumped again on Friday (Jan 12), leaving the largest cryptocurrency heading for its worst weekly performance in three years as regulators around the world step up scrutiny out of concerns ranging from investor losses to strains on power systems.

Bitcoin was trading at US$13,019 as of 8:24am Hong Kong time, putting it on track for a 22 per cent slide this week, the deepest since January 2015, according to Bloomberg composite pricing. The token is down about 33 per cent from its mid-December peak, which came just after the introduction of futures trading on regulated exchanges in Chicago.

Among the blows to cryptocurrencies this week was the South Korean justice minister's reiteration of a proposal to ban local cryptocurrency exchanges, though the comments were later downplayed by a spokesman for the president. Meanwhile, bitcoin mining - the process needed to facilitate transactions - is set to become more expensive as China's government cracks down on the industry.

In the US, scrutiny is set to increase amid concerns about the potential use of cryptocurrencies for fraudulent purposes such as money laundering. Securities and Exchange Commission Chairman Jay Clayton and Commodity Futures Trading Commission Chairman J Christopher Giancarlo are set to testify to the Senate Banking Committee on risks tied to bitcoin and its counterparts, according to a person with direct knowledge of the matter.

The committee intends to hold a hearing in early February, the person said.