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Amid crackdown fears, Bitcoin slumps to six week low

Tuesday January 16, 2018 7:01 PM, & Agencies

Bitcoin Price

The price of top digital currency bitcoin dipped below $12,000 on Tuesday for the first time since December 5, following reports of a further crackdown on the cryptocurrency market.

Bitcoin slumped by almost 15 percent, trading at $11,816 as of 10:30 am GMT. The cryptocurrency’s market capitalization currently stands at around $198 billion, according to Reuters.

Other virtual currencies including ethereum and ripple have also dipped significantly. Ethereum was trading at $1,090, down more than 18 percent in the last 24 hours; while ripple fell by almost 26 percent to $1.37 per token.

Regulators across the globe, in countries including China, India, Brazil and South Korea, have been warning investors about the risks of trading in cryptocurrencies.

According to recent reports, authorities in China are planning to block domestic access to Chinese and offshore cryptocurrency platforms that allow centralized trading.

Regulators will also target people and companies that provide market-making, settlement and clearing services for centralized trading.

Bitcoin users in India have been facing difficulties with deposits and withdrawals after the country’s banks blocked all crypto-trading.

Last month, the Indian Income Tax Department raided bitcoin exchanges across the country, seeking to identify cryptocurrency traders. The raids were conducted because of alleged tax evasion by exchange customers.

Earlier, Indian government and Morgan Stanley, a leading global financial services firm providing investment banking, securities, wealth management and investment management services, had also warned against investing in bitcoin and other cryptocurrencies.

"There is a real and heightened risk of investment bubble of the type seen in Ponzi schemes which can result in sudden and prolonged crash exposing investors, especially retail consumers losing their hard-earned money.

"Consumers need to be alert and extremely cautious as to avoid getting trapped in such Ponzi schemes," the Indian Finance Ministry warned.

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