Bitcoin prices slid 12% to $8,897 Thursday, deepening a selloff that has persisted since the start of 2018. Investors who bought Bitcoin at its peak of about $20,000 in December have consequentially seen their asset lose over half its value over the past month. It’s Bitcoin’s lowest point since November, with the digital asset having lost some $84 billion in market cap over the last month.
Other cryptocurrencies also fell Thursday, with Ethereum prices dipping by 7% to $1,030, and Ripple falling 11% to 99 cents.
Continued concern about whether Bitcoin prices—and perhaps those of other cryptocurrencies—are being artificially propped up could be driving the slide.
In December, the Commodities and Futures Trading Commission (CFTC) issued a subpoena to Bitfinex, one of the largest cryptocurrency exchanges in the world, Bloomberg reported Tuesday. Specifically, regulators are curious about Bitfinex’s relationship with virtual currency Tether, which the exchange claims is pegged to the dollar. So in theory, one dollar equals one Tether.
Tether has become a popular way for some investors to buy Bitcoin on exchanges. But the CFTC’s probe feeds into worries that Tether may not be actually backed by the dollar, as Bitfinex has provided little proof of the relationship, critics say. That hazy relationship has fueled concerns that Bitfinex may be simply creating Tether coins out of thin air and using Tether to buy Bitcoin—thereby propping up the price of the latter asset.
What may have also contributed to the slide is the fact that more governments are cracking down on cryptocurrencies. Not only did South Korea—once the third-largest market for Bitcoin trading—ban cryptocurrency exchanges in early January, but India’s Finance Minister Arun Jaitley announced plans this week to ban the use of Bitcoin and other cryptocurrencies as payments. Granted, India is not as large of a market for Bitcoin as South Korea, nor do all Bitcoin investors see the digital coin as a payment system, but the news did help shake investors who have already had a messy start to the year.