Bitcoin Experiences Sizeable Drop Amid Worry About American Regulation

Bitcoin Experiences Sizeable Drop Amid Worry About American Regulation. Although the bitcoin has risen to record highs in recent time, it did lose a sizeable amount of its value in recent time. The bitcoin suffered a 9% drop in its value but has rebounded for the most part en route to its aim to reach the $6,000 mark in value.

The currency fell on October 18 by around $500 or nearly 9% of its value. It got down to around $5,100 before it started to rebound. The currency has moved past the $5,600 mark again but was still below the record high of around $5,800 that it attained in the same month.

The value of the bitcoin is still dramatically higher than it was at the start of the year. It had a value of less than $1,000 in January and has since picked up dramatically in its value. The sudden news could cause worries to some investors though.

American Analysis

The concern that caused this decline in the popular investment’s value was a new report from the United States Commodity Futures Trading Commission. The group released a report on cryptocurrencies like the bitcoin.

The new report says that virtual currencies could be overseen by the commission. This could work in cases where they are in derivatives contracts or if there are concerns surrounding possible fraud or manipulation of a currency. The regulation would be the strongest form of control that the United States would have over the bitcoin although it would not necessarily mean the currency would be controlled in more of an extensive manner than what it is already like at the moment.

This report suggested that the currency could be heavily regulated by the United States in the future, thus causing a very brief selloff that cut down on its value. This development was especially concerning as the Chicago Board Options Exchange is planning on launching a series of bitcoin derivatives products in the coming year.

The bitcoin is not the only cryptocurrency that experienced a hit in value. Ethereum experienced a slight decline but it is still trading over $300. Litecoin also had a minor drop but it has just about recovered and is back to nearly $60 in value.

Another Recovery

The new recovery for the bitcoin is another sign of how the currency may be relatively resilient when it comes to significant challenges that many develop over time. In September, the bitcoin experienced a decline after the Chinese government announced heavy restrictions on how bitcoins and other digital currencies could be used in the country. The value of the coin and other currencies has grown to record highs since then.

Still, the development from the American government does create a bit of concern for some investors. This especially comes as the bitcoin has been heavily volatile in recent time. The bitcoin is designed to be a deregulated currency with no central body having any real control over it. Although the currency would still have no central body, it would still be a problem if the United States tried to analyze the currency and regulate it a little more.

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