Jitters over bitcoin as sell-off surpasses 20%

Bitcoin fell 4.2 per cent to US$8,936.50 in New York yesterday morning, after earlier losing as much as 10 per cent. People are getting anxious and signs of growing regulatory scrutiny have added to investor jitters.
Bitcoin fell 4.2 per cent to US$8,936.50 in New York yesterday morning, after earlier losing as much as 10 per cent. People are getting anxious and signs of growing regulatory scrutiny have added to investor jitters.PHOTO: REUTERS

Bitcoin's rough week looks set to end on a sour note.

The virtual currency fell 4.2 per cent to US$8,936.50 in New York yesterday morning, after earlier losing as much as 10 per cent.

It has slumped more than 20 per cent this week amid increased regulatory scrutiny in the United States and Japan, an attempted theft at one of the biggest trading venues, and news that the bankruptcy trustee for Mt Gox has started selling the now-defunct exchange's holdings to repay creditors.

"The screen is flashing red today and people are getting fearful," said Mr Caleb Yap, co-founder of Singapore Bitcoin Club. "Weak hands are definitely wanting to sell. If Mt Gox can dump US$400 million (S$527 million) of Bitcoin just like that and there're still billions left, the fear is, when is the big drop coming?"

Mt Gox's bankruptcy trustee Nobuaki Kobayashi disclosed on Wednesday in Tokyo that he sold about US$400 million of Bitcoin and Bitcoin Cash since late September, part of the hoard left behind when the exchange collapsed four years ago. Mr Kobayashi is studying further sales of the US$1.8 billion remaining.

Signs of growing regulatory scrutiny have added to investor jitters.

On Thursday, Japan's Financial Services Agency ordered two exchanges to halt operations for a month and penalised four others. That announcement came just hours after a warning from the US Securities and Exchange Commission that many online trading platforms should register with the agency.

Around the same time, Binance, one of the world's biggest crypto exchanges, said it had been the target of a "large-scale phishing and stealing attempt". While it said "all funds are safe", it noted that it was unable to reverse some trades from accounts targeted by the hackers.

"These are all growing pains," said Hong Kong-based trader S.J. Oh of Octagon Strategy. "And while hurtful today, the fact that regulators are cracking down will be good in the long run."

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A version of this article appeared in the print edition of The Straits Times on March 10, 2018, with the headline 'Jitters over bitcoin as sell-off surpasses 20%'. Print Edition | Subscribe