Bitcoin price falls below $4,500 for the first time in a year as crypto-currency turmoil continues
BITCOIN'S value has fallen below $4,500 (£3,887) for the first time in over a year as turmoil in the crypto-currency market continues.
Coindesk, which monitors the change in cryptocurrency values, reports that Bitcoin now stands at $4,297 (£3,341).
Bitcoin last fell below the $4,500 barrier in October 2017.
The value of the cryptocurrency has dropped over the past year from its all-time high of $17,600 (£13,680) in December 2017.
CoinDesk also reports that the size of Bitcoin’s collective market value dropped below the $100billion (£77.7billion) level for the first time since last November.
It now stands at just under $75billion (£58.2billion).
What is Bitcoin?
Bitcoin got you baffled? Here's what you need to know:
- Bitcoin is a virtual currency
- It's traded between people without the help of a bank
- Every transaction is recorded in a public ledger, or 'blockchain'
- Bitcoin is created by mining
- Mining involves solving difficult maths problems using computer processors
- Bitcoin can be traded anonymously, which makes it a popular way of funding illegal activities
- A single Bitcoin is worth just under £5,000 today, but the value fluctuates wildly
- Bitcoin is one of many different cryptocurrencies, but by far the most popular
Experts point the finger for the cryptocurrency's latest crash to the downward movement of other cryptocurrencies.
Last week saw the splitting of sub-currency, Bitcoin Cash, into two - Bitcoin SV and Bitcoin Cash.
Gary McFarlane, a cryptocurrency expert at investment platform, Interactive Investor, explained: "Craig Wright, who claims to be Bitcoin inventor Satoshi Nakamoto and whose nChain startup is doing the development work on Bitcoin Cash SV, has even less friends in the crypto community after this mess.
"He wanted to increase the block size of Bitcoin Cash to 128MB – a laudable aim in itself – but the lack of governance rules, to put it mildly, has blown up in the face of the coin, itself a fork from Bitcoin in August 2017.
"Bitcoin trading platform Kraken has gone as far as to warn customers against trading Bitcoin SV because of “high risk” and “red flags”.
"None of this has been good press for crypto and certainly not for Bitcoin Cash, which is trading at $220, down 38 per cent in the past 24 hours and Bitcoin SV trading at $55, 39 per cent lower."
Mr McFarlane adds that banks looking to use cryptocurrencies has also been viewed in a negative light by the industry.
He said: "Another factor is the news that central banks are seriously looking at Central Bank Digital Currencies, with Christine Lagarde - managing director of the International Monetary Fund - describing crypto as “legitimate”.
"This may have been interpreted negatively by the crypto industry as it could be an embrace that could stifle crypto’s original use as a “digital cash”, something central banks understandably always disliked."
Short sudden changes in Bitcoin prices can often be attributed to trading bots initiating a buy or sell that then triggers others to do the same, creating a domino effect.
Mr McFarlane said: "The crypto markets are hugely volatile; on the one hand because they are a new and immature market dominated by individual investors, and on the other hand because it is a new technology the worth of which is hard to assess."
Check out our Bitcoin and cryptocurrencies homepage for all the latest news on cryptocurrencies and what these alternative currencies actually are.
More on money
For more on Bitcoin, read our guide to why has the price of Bitcoin collapsed and how can you buy the cryptocurrency.
Always carry out thorough checks before buying into any cryptocurrencies.
Earlier this year, we reported how DJ Khaled and Floyd Mayweather promoted a multi-million dollar cryptocurrency scam.
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