Machines in Singapore sold out of bitcoin as prices drop below US$10k

A customer paying for her coffee with cryptocurrency at Ducatus Cafe in Robinson Road. The bitcoin ATM at the cafe was sold out of the currency yesterday.
A customer paying for her coffee with cryptocurrency at Ducatus Cafe in Robinson Road. The bitcoin ATM at the cafe was sold out of the currency yesterday.PHOTO: REUTERS

Many snapping it up despite warnings from global regulators

Bitcoin machines at Ducatus Cafe in Robinson Road and Tiong Bahru Plaza were sold out of the cryptocurrency yesterday as enthusiasts piled in when prices fell more than 23 per cent this week. It tumbled to below US$10,000 on Wednesday for the first time since Dec 1.

Despite the dramatic price drop amid news that more governments are planning to tighten the reins on digital currency trading and warnings from global regulators, some investors seized the opportunity to snap up the cryptocurrency at ATMs islandwide yesterday.

Ducatus Cafe manager Philip Lim said: "We had to put an 'out of service' sign at our machine. Over the past two days, we've had 20 to 30 people line up, from about 10 on a usual day."

But Bitcoin Exchange founder Zann Kwan, who owns two machines at Tiong Bahru and Hong Lim Complex, noted the buying was nothing compared with the frenzy in December when prices were hitting new records almost daily.

"Sellers are holding back in anticipation of higher prices, so we have less bitcoin supply. Buyers on the other hand are hoping prices will crash some more, so they can buy," she said.

According to CoinDesk, bitcoin hit a low of US$9,714.02 on Wednesday before recovering to US$11,190.64 yesterday.

The plummeting prices have prompted online posts with suicide hotlines in the United States for despairing cryptocurrency investors. Those who took out debt to buy such currencies late last year have been particularly hard hit as bitcoin plunged from the all-time high of US$19,511 in mid-December.

According to CoinDesk, bitcoin hit a low of US$9,714.02 on Wednesday before recovering to US$11,190.64 yesterday.

Even Mr Lim said this week's drop was an "unhealthy one that created some panic", but having seen bitcoin go through wild swings in recent years, he remains confident of its upside potential.

Fuelling the pessimism is news that South Korea, which accounts for up to 15 per cent of daily bitcoin trading, is considering shutting down all local virtual currency exchanges. China has shut exchanges, but is reportedly taking further steps against new forms of online trading as well as bitcoin mining operations there. Bitconnect is moving to shutter its lending and exchange platform amid increased scrutiny from US regulators and criticism that it is a Ponzi scheme.

In response to The Straits Times, the Monetary Authority of Singapore said: "MAS regulates the activities that surround virtual currencies if those activities fall within our scope as a financial regulator. The risks surrounding virtual currency exchanges include those related to money laundering and terrorism financing (ML/TF).

"Virtual currency transactions, given their anonymous nature, are particularly vulnerable to abuse for ML/TF. MAS will therefore introduce anti-money laundering and countering the financing of terrorism requirements on virtual currency intermediaries that deal in or facilitate the exchange of virtual currencies for real currencies. The regulations will extend to the exchange of virtual currency for fiat currency, or another virtual currency."

 
A version of this article appeared in the print edition of The Straits Times on January 19, 2018, with the headline 'Machines sold out of bitcoin as prices drop below US$10k'. Print Edition | Subscribe