Bad News for Bitcoin Investors: It drops below $9000
Bitcoin’s month-long price slide continued on Thursday as the virtual currency fell below $9,000 for the first time since November. As we publish this article, one bitcoin is worth $8,700. That’s down 12 percent over the last 24 hours and 55 percent from December’s peak of $19,500.
The latest price decline comes amid growing concerns that the broader cryptocurrency ecosystem has become rife with scams and other questionable behavior. None of these developments have been focused on bitcoin specifically, but the cryptocurrency ecosystem is highly interconnected. All the other major cryptocurrencies have suffered losses over the last 24 hours, and many virtual currencies have seen their value decline by double digits.
The first bit of bad news this week was Facebook’s announcement that it was restricting cryptocurrency ads on its various platforms.
“We want people to continue to discover and learn about new products and services through Facebook ads without fear of scams or deception,” Facebook wrote. Facebook described the policy as “intentionally broad” and listed “use your retirement funds to buy bitcoin” as an example of a cryptocurrency ad that wouldn’t pass muster under the policy.
Also this week, the Securities and Exchange Commission announced it was shutting down a little-known cryptocurrency project called AriseBank. The project was endorsed by boxer Evander Holyfield and claimed to have raised $600 million, but the SEC contends that the project was fraudulent.
Meanwhile, rumors are swirling about Tether, a cryptocurrency whose value is pegged to the United States dollar. Tethers are supposed to be redeemable for dollars at any time, but in recent months Tether has struggled to gain access to the conventional banking system and has failed to produce a financial audit demonstrating its solvency.
A significant number of bitcoin traders use Tether dollars as a substitute for actual dollars, so if Tether is revealed to be insolvent, it could have a big impact on the broader cryptocurrency economy.