Charles Hayter, the CEO of CryptoCompare, said: “It’s the usual — fears on regulation in the US after ICO subpoenas and exchanges coming under fire.”
Bitcoin is slumping on Friday, down by 5% in early morning trade to trade at a one month low.
Analysts say that the slump is being caused by a string of bad headlines for the sector this week that have dented investor sentiment.
“Our take on this is that the new investors in the space don’t have enough time to analyse what’s happening,” analysts for the London Block Exchange write in its daily market report on Friday.
“The amount of fake or misleading information reported over the past few days, as discussed in yesterday’s report, made the ‘regulation meets Mt. Gox dump and Binance pump’ narrative far too scary. So much so, in fact, that even the more dedicated (but less sophisticated) traders believe it.”
Regulators around the world have been ramping up supervision of the cryptocurrency space this week, with Japanese regulators suspending two cryptocurrency exchanges and the US Securities and Exchange Commission telling crypto exchanges they must register with it. The SEC earlier this month issued a wave of subpoenas to crypto companies.
Jameel Ahmad, Global Head of Currency and Market Research at FXTM, told BI: “It appears that authorities are continuing to closely monitor Bitcoin, and signs of further concerns over regulation do have the potential to keep sending the value of Bitcoin lower.”
At the same time, market confidence has been shaken by news that the trustees of bankrupt former exchange Mt Gox are liquidating its bitcoin holdings. $400 million-worth has been sold since last September and some market participants have blamed the sales for causing a price crash at the start of the year.