Bitcoin was off to a bad start Thursday, after the world’s largest cryptocurrency failed to recover from a wider market sell-off spurred by new regulations.
“The sell-off was triggered by a number of factors, notably, weariness over increased regulatory scrutiny of ICOs [initial coin offerings], the Mt.Gox bitcoin dump and what seems to be some heavily liquid traders pushing for future buy-back opportunities,” Thomas Glucksmann, head of APAC business development at cryptocurrency exchange Gatecoin, told CNBC on Thursday.
The cryptocurrency got off to a good start on Monday, with a price per token of $9,915 and a total market cap of $167.7 billion. The token dropped sharply over the course of the week, though, reaching a low of $7,799 per token and a market cap of $132 billion, a value loss of nearly $36 billion. It’s not just Bitcoin: the cryptocurrency market in total has moved from being worth a high of $399 billion on Monday to a low of $309 on Thursday.
Bitcoin’s week got off to a rocky start last Thursday when it was revealed that Nobuaki Kobayashi, a Japan-based attorney and trustee for the defunct Mt. Gox cryptocurrency exchange, had sold nearly $400 million in tokens. The exchange, which at one point handled 70 percent of all Bitcoin transactions, collapsed in 2014 after a hack. Kobayashi’s sell-off was linked to multiple dips in the price of Bitcoin at the start of the new year.
The market has also faced pressure after Google announced on Wednesday that it would block all cryptocurrency advertisements on its services. The new ad policy, set to come into effect in June, also blocks stock market speculation and similar products. It follows a similar move from Facebook at the end of January.
While in the short term it seems current prices are a far cry from their December highs of nearly $20,000, cryptocurrency is rather undervalued if in the future it takes on a larger chunk of the $80 trillion global economy. John Oliver noted in an episode of Last Week Tonight aired Sunday that Bitcoin “could eventually be worthless, or it could be worth billions and adopted as a new global currency.” If the latter is the case, this week’s movements will seem laughably small in the future.