In January Bitcoin saw $44.2bn wiped off the $200bn market value generated last year, the largest monthly loss in dollar terms seen so far since the creation of cryptocurrencies, Bloomberg reports.
Bitcoin reached a peak of almost $20,000 in early December after the introduction of futures contracts on regulated exchanges in the US, but the cryptocurrency and other virtual currencies have suffered from a change in sentiment this year.
The 30% drop in Bitcoin comes as the US derivatives regulator called for exchanges listing new futures on virtual currencies to be required to prove they have consulted brokers and trading firms first in a bid to calm brokers, the FT reports.
The launch of Bitcoin futures at exchange companies Cboe Global Markets and CME Group in December prompted FIA, a trade group for futures brokers that includes Wall Street banks, to issue a complaint that its members were not part of the approval process despite bearing the risk of a trader default.
Christopher Giancarlo, chairman of the Commodity Futures Trading Commission, added that commission staff would also examine if changes were required in the governance of clearing houses that handle virtual currency products.
Stephen Innes, head of Asia Pacific trading at Oanda, told Bloomberg that cryptocurrency is likely to fall further to the $5,000-$6,000 range before eventually recovering to $10,000-$15,000.
"Once we got to $10,000, crypto had adopted this Teflon persona of late that it's always going to find a base and go back up again," Innes said. "When we're talking in the realm of riskier assets, and something shaves off 50% of its value, it tells me there's going to be an extension lower. The sad thing is a lot of people will be burned, because they will continue to buy dips."
At T.Rowe Price, we believe that while a broadening global economic recovery should continue to support markets into 2018, high asset valuations leave little cushion against unexpected market events. In this environment, bonds offer a counterweight to...
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