In Depth

Bitcoin price: what caused values to crash?

Cryptocurrency market slumps as Facebook’s Libra coin hits turbulence

After months of gains and investor interest, bitcoin is on course to end the month at a loss for the first time since January.

Bitcoin values have frequently dipped below the $10,000 (£8,050) mark over the past few days, just two weeks after prices surpassed the $13,000 (£10,460) threshold for the first time this year, according to ranking site CoinMarketCap

Despite trading close to the $11,000 (£8,850) mark at the start of the month, values may continue to sink below $10,000 over the coming days, the website reports. Bitcoin is currently trading at $9,820 (£7,900), as of 2:30pm UK time.

As is often the case in the cryptocurrency market, bitcoin’s price fluctuations have also had an impact on its rivals. 

CoinMarketCap’s figures show that Ethereum, which ranked second behind bitcoin in the market, has slumped from its July high of $317 (£255) to today’s price of $217 (£175).

Ripple, a banking-focused cryptocurrency that sits third in the rankings, has also endured a difficult month. It’s currently valued at $0.31 (£0.25), down from the month’s high of $0.41 (£0.33), the ranking site says. 

What caused prices to tumble?

The losses appear to have occurred shortly after a hearing where David Marcus, president of messaging products at Facebook, fielded questions about the social media giant’s upcoming cryptocurrency, called Libra, from US lawmakers.

According to The Independent, one of the senators told Marcus that Facebook was “delusional” to believe people would trust it with their money, while another said the company’s agenda promotes “flagrant displays of bulls***”.

Other senators, meanwhile, raised concerns about the cryptocurrency being exploited by “criminal organisations to facilitate money laundering, or even finance terrorist activities”, the news site says. 

The hearing appears to have “spooked” bitcoin traders, the Daily Express says, prompting mass sell-offs that saw the cryptocurrency’s value plummet. 

Can values recover?

Possibly, but the next few days could be crucial for the virtual coin.

If bitcoin values are able to surpass and - critically - stay above the $10,000 mark over the next few days, the bull run that has propelled the digital currency throughout the year may be back on track, says cryptocurrency news site CoinDesk.

But all signs point to a “bearish” trend, the site adds, with prices looking set to slide as the month comes to a close.

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