BITCOIN tanked in value today, falling below £9,000 with 5.77 percent being wiped off its value in 24 hours. But why is BTC falling? Can the bull market return now the ‘Tokyo Whale’ has stopped selling?
Despite a strong start to the week - including a rise to $9,937 at 10.19am - bitcoin plunged in value this afternoon, shedding nine percent of its price to fall to $8,956 at 8.14pm.
Bitcoin’s turbulence follows a unnerving few days last week after the Securities and Exchange Commission’s (SEC) vow to regulate cryptocurrencies.
Bitcoin slumped to $8,513 after the SEC warned on Wednesday of “potentially unlawful” systems that trade cryptocurrencies.
Investors also reacted angrily to a sell-off of crypto assets by a Japanese bitcoin holder which they believe impacted negatively on the digital currency’s value.
Why is BTC falling now?
Bitcoin has shed more than 20 percent of its value over the past week, leaving investors “miserable”, according to strategist Tom Lee.
Bitcoin experts said it will be a very “tough time to own” the digital currency over the next two to three weeks.
Using a scale known as the Bitcoin Misery Index (BMI) - which measures how sad or happy investors are by measuring the consistency of bitcoin to USD over the last 90 days - Mr Lee said the readings are currently at their lowest levels since August 2011.
Who is the ‘Tokyo Whale’? Why are investors unhappy?
Bitcoin’s fall follows a spate of bad market news for the cryptocurrency with threats of regulation from various quarters including the US and Japan.
It was announced last week that Nobuaki Kobayashi, the Mt Gox trustee, sold $400 million of bitcoin and bitcoin cash over January and February to pay off creditors.
He still has another 166,00 bitcoin to sell - currently worth $1.6 billion - but because the sale is unlikely to happen until September this year, it could mean the return of a bull market, according to one investment firm boss.
Brian Kelly, CEO of BKCM, told CNBC Monday today: "It's still hanging over but now we've got six months or so before that's an issue.
"In terms of the Tokyo Whale it's a supply issue, but it's also a sentiment issue."