Bitcoin slid below US$10 000 just three weeks after surging above it for the first time in more than a year as US legislators expressed deep scepticism about the viability of cryptocurrencies.
The largest digital coin plunged as much as 12%, bringing its three-week rout to 25%. It traded for $9 591 as of 3pm in New York, down 25% from its June high of $12 733. Ethereum and Litecoin both declined 13% Tuesday.
Cryptocurrencies came under fire during a US senate banking committee hearing about Facebook’s plan to create its own digital token, known as libra. Lawmakers compared the social media giant to a toddler playing with matches who burns the house down, blasted it for repeatedly violating consumers’ privacy and accused the company of cheapening social discourse and polarising America.
The criticisms underscored how uncomfortable financial regulators remain with the idea of digital coins coexisting with fiat currencies. While Facebook’s initial disclosure of libra was credited with contributing to bitcoin’s recent rally, the social media giant’s plans have rekindled debate on how crypto should be regulated.
Bitcoin is still over twice the price where it started the year, having hovered around or below the $4 000 level from January to March. It caught a bid in April and went parabolic, nearly reaching $14 000 by late June. Since then, it has struggled to maintain that momentum. It briefly fell below $10 000 on Monday, but Tuesday’s move below the round number has lasted longer. — Reported by Joanna Ossinger, with assistance from Robert Schmidt, Ben Bain and Kurt Wagner, (c) 2019 Bloomberg LP