Bitcoin Plunges To $7000 In Worst Start To Year Ever

Update 1305ET: Bitcoin just traded at $7,000 for the first time since Nov 14th 2017.

 

This leaves Bitcoin down 47% year-to-date, the worst start to a year for the cryptocurrency since inception...

 

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Update 1025ET: Bitcoin's collapse has continued through the morning to a low price of $7141...

Meaning it is down over 63% from its record highs - one of the biggest drops in history...

 

And if the VIX-BTC correlation has anything to say - there is more to come...

 

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After surging to $20,000 less than three weeks ago, Bitcoin tumbled below $8,000 again overnight following a report from Chinese media that China will block all websites related to cryptocurrency trading and initial coin offerings (ICOs) – including foreign platforms – in a bid to finally quash the market completely, according to Sina.

On February 4, 2018, according to the Financial Times newspaper run by the People's Bank of China, a series of regulatory measures will be taken against ICO and virtual currency transactions at home and abroad, including banning the existence of relevant businesses and banning and disposing of domestic and foreign virtual currency exchange websites. -Sina (translated)

As SCMP adds, quoting an article published on Sunday night by Financial News, a publication affiliated to the People’s Bank of China (PBOC), "To prevent financial risks, China will step up measures to remove any onshore or offshore platforms related to virtual currency trading or ICOs."

Meanwhile, reports are rolling in that crypto-related content are being actively blocked by Chinese search engines.

The rest of the major cryptocurrencies are taking hits as well:

The cryptoheatmap is, in a word, red.

In September of last year, Bitcoin plunged around 20% after seven Chinese ministries banned ICOs and shuttered local Bitcoin exchanges in their "Notice on Preventing the Financing Risk of Token Issuance." 

Fast forward to today, when China appears to have unleashed its latest crackdown on cryptos. In the Financial News article, it acknowledged that recent attempts to stamp out digital currencies by shutting down domestic exchanges had failed to completely eradicate trading.

“ICOs and virtual currency trading did not completely withdraw from China following the official ban … after the closure of the domestic virtual currency exchanges, many people turned to overseas platforms to continue participating in virtual currency transactions.

Chinese authorities pointed to Bitcoin's ability to facilitate "illegal fund-raising and other types of illegal financial activities," pointing to "pyramid schemes, fraud and other issues."  

In response, some of those business have simply sidestepped the September regulations by relocating their business off of mainland China to Hong Kong. Sunday's announcement is designed to mitigate that by banning domestic and foreign "virtual currency exchange websites" from web searches. 

“Overseas transactions and regulatory evasion have resumed … risks are still there, fuelled by illegal issuance, and even fraud and pyramid selling,” the article said.

China’s official Xinhua news agency quoted the PBOC on Monday afternoon as saying it would tighten regulations on domestic investors’ participation in overseas transactions of ICOs and virtual currencies, as risks are still high in the sector.

To that end, Chinese search engines Baidu and microblog Weibo have begun blocking crypto-conent.

the South China Morning Post news site reported that when the terms, in Chinese, bitcoin, cryptocurrency, and ICO were searched on Chinese search-engine Baidu and microblog Weibo, no obvious paid sponsored content came up alongside the expected organic results.

While Baidu had stopped advertising cryptocurrency-related searches back in August 2016, it is unclear when they started allowing them again, and they have not confirmed any new crypto-based advertising block. Weibo has confirmed that they have banned cryptocurrency-related advertising. -Cointelegraph.com

“It is common for people to use VPNs [virtual private networks] to trade cryptocurrencies, as many exchange platforms relocated to Japan or Singapore,” said Donald Zhao, an individual bitcoin trader who relocated to Tokyo from Beijing late last year, following the ban.

“I think the new move literally means it would be even harder to circumvent the ban in China … people promoting related business programmes may be arrested,” Zhao said.

The tighter regulation from the PBOC will “definitely weigh on the cryptocurrency universe,” said Wayne Cao, who runs a company that recently offered 10 billion tokens in an ICO. “Most of the Chinese ICO projects are invested in by Chinese investors. So if they are blocked, the whole cryptocurrency market will be dragged down.”

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As we reported on Friday, NYU economist Nouriel "Dr. Doom" Roubini, after taking a very, very long sabbatical from the media scene - told Bloomberg TV that Bitcoin is "the biggest bubble in human history" and that this "mother of all bubbles" is finally crashing.

Given that the skyrocketing price of Bitcoin and other cryptocurrencies has driven the price of video cards (used to mine cryptocurrency) through the roof - robbing eager PC gamers of their cutting edge rigs, it will be interesting to see if a protracted drop in the price of Bitcoin and other cryptocurrencies will result in a flood of cheap GPUs hitting the market. Shares of AMD and Nvidia - the primary manufacturers of cards used for crypto mining, should also be interesting to watch. 

Comments

Apollo55 Pandelis Mon, 02/05/2018 - 07:57 Permalink

You mean trying to protect their citizens from falling into the cleptocurrencies Ponzi Schemes is not Capitalism? However I am not surprised at all that Western countries have not warned their citizens against Cleptocurrencies since Cleptos serve well their financial paper FIAT currencies to absorb the Trillions their Central Banks have printed over the last few years.

In reply to by Pandelis

DingleBarryObummer Apollo55 Mon, 02/05/2018 - 08:01 Permalink

I'm tweaking my nipples right now.  Speculating/gambling with hot inflated currency should be less rewarded in our society, not more.  Productive people should be more rewarded and respected.  While I think blockchain technology might have great potential in serving for the betterment of humanity, fuck bitcoin and fuck this bitcoin bubble

In reply to by Apollo55

Automatic Choke manofthenorth Mon, 02/05/2018 - 12:46 Permalink

the Chinese govt isn't trying to protect its citizens from ponzi...they could probably care less.   they ARE trying to prevent the local elites from offshoring their wealth.  since they couldn't stop it outright, they are content to let them offshore it into cryptos, then crash the cryptos.

 

alt-topic - is McAffee searching for dick recipes yet?

In reply to by manofthenorth

Herd Redirecti… Automatic Choke Mon, 02/05/2018 - 14:11 Permalink

Nah, its just that the political elite have already moved their money out of the country, so now you have to close the gates to the rest of the country.  It is a classic move by the wealthy.  They know it could destabilize the entire nation/economy to let everyone move capital freely. 

Putting up 'barriers to entry', I believe they call it.  Or barriers to exit, in this case.

In reply to by Automatic Choke

exlcus IH8OBAMA Mon, 02/05/2018 - 13:12 Permalink

I really don't understand the hate on this board for bitcoin. Do you guys not get that the whole point of bitcoin was to give the middle finger to the central banks? 

Yeah, it's been in a bubble, it was obvious for months. It had to pop eventually. One year ago it was $1,000, today it is $7,000. Do you think I'm crying?

I got into bitcoin when it finally got a little major press during its 2011 bubble and burst. I'll be involved in bitcoin if it's a million dollars or $1, I really don't care. It's the best antidote to central banks around. (And yes I own some physical gold and silver but bitcoin works in the real economy a lot better than gold or silver does.)

In reply to by IH8OBAMA

manofthenorth exlcus Mon, 02/05/2018 - 13:35 Permalink

I do not hate bitcoin. I am however highly skeptical of all that some expect it to be.

It has almost no value as a utility in the "real economy".

In its present state it is almost useless as "money".

A cumbersome process to get in or out of. Wildly changing value as well as transaction fees make it shit so far as a currency.

I love the idea of something to use to beat the bankers out of business, that is why I hold cash and metals and carry ZERO debt.

Bitcoin has a long way to go to prove itself the champion of the people.

Perhaps someday after the dust settles I will be able to see value in it and trust it as a long term store of value.

Until then I am a saver and NOT a speculator. 

Best of luck to all you speculators but my hard earned dollars will not be stored in the wild west space of the current

crypto craze.

In reply to by exlcus

exlcus manofthenorth Mon, 02/05/2018 - 14:30 Permalink

Do paper federal reserve notes really have value? They do because people accept them in trade. Same for Bitcoin and Ethereum.

It has plenty of utility. We live in a global society. Sending money to anyone in the world, any amount of money, with transaction fees usually less than $1 has no utility? Really?

I've bought plenty of things with cryptos, do you know how many places accept them now, and you're saying they have no utility?

A cumbersome process to get into? Back in the day, you went on a site, you met a guy on the corner of the street, you give him cash, you get crypto. As easy as buying gas.

Then the govt got involved, as always. Now you use Coinbase. I can buy crypto in less than 1 minute using Coinbase. And my limit is like $100,000 there now. They just pull the money out of my bank account the next day. Same if I want to sell it. Yes, I had to setup an account, just like setting up a brokerage account. Nobody is complaining it's impossible to buy stocks.

Yes, they're volatile. They're not supposed to be. They're partly a victim of their own success. And party, that's the current society we live in where speculation is rewarded over smart investing. Now everyone's a speculator looking for the next hot thing. Crypto finally got some well-deserved recognition so the speculators piled into it. I don't want them. F the speculators. Hopefully they're pulling out of it for good. The true believers like me aren't phased by them, we're just annoyed by them.

Does it have intrinsic value? No. Does your checking account really have intrinsic value? No, it's some ones and zeros on a computer, same at bitcoin.

In reply to by manofthenorth

D503 exlcus Mon, 02/05/2018 - 13:37 Permalink

A ledger that tracks every exchange can only serve those with the means to evaluate the total volume and adjust accordingly. 

All crypto is an order of magnitude more transparent than even credit or debit as it fails to evade even direct to cash exchanges. It has to be moved through another layer to then be reverted to cash.

As the individual lacks the time and typically the resources to evaluate the data, only those already tracking objects like google adsense, alexa web traffic, Twitter keywords, and Facebook ad revenue can benefit disproportionately in predictive analysis. 

If I were big business, crypto is exactly what I would want to gain yet another advantage over my competitors, and you can see that in how it is pushed everywhere that skeptics to the system are frequenting. 

Those who historically were all cash, barter, and precious metals are now also letting their ledgers be opened by anyone with the means (algorithms) to do so. 

So no, crypto is not a big middle finger to the banksters; it is the Vaseline and the drinks that convinced a large portion of private individuals to give up their freedom and control of their wealth. 

 

In reply to by exlcus

exlcus D503 Mon, 02/05/2018 - 16:10 Permalink

D503, Bitcoin was the very first cryptocurrency. It's like crypto 1.0. They have updated it just a little over the years, like to version 1.5, but the community is very stubborn in resisting change, because it is actually a very good first attempt. (Perhaps even too good, and that's where the conspiracy theories start...)

There are much better cryptos out there now. Ethereum for regular stuff. If you want privacy, go with monero. It is not an open ledger. It's very private. 

Privacy was never really the intent of Bitcoin.

In reply to by D503

Automatic Choke exlcus Mon, 02/05/2018 - 13:45 Permalink

Exlcus - I agree with M.O.T.N.   I don't hate Bitcoin, I am just skeptical.   Also, I disagree with your "the whole point of bitcoin was to give the middle finger to the central banks".    That was the **stated** point, but I am far more cynical -- I think the whole point of bitcoin was to fleece greedy innocent folks who don't understand how ponzis work.

 

In reply to by exlcus

manofthenorth Automatic Choke Mon, 02/05/2018 - 13:54 Permalink

I must admit that the whole thing is a bit of a mystery to me but I have eyes to see.

Since just before Christmas something around $400,000,000,000 has been taken off the crypto gambling tables.

That is half of the US Military budget for a year gone in a little over a month.

That is a hell of a lot of money.

So if all the smart guys are HODLers then who cashed out and why, where did all the cash go ???

So many unanswered questions.

VIX at 24....

BTC at $6708.....

            $6660 at 10:48...........oops

streets are blood red today for traders.

Who is going to back up the truck ????

 

In reply to by Automatic Choke

pods manofthenorth Mon, 02/05/2018 - 16:05 Permalink

You can't look at market cap for cryptos in those terms. It just doesn't hold up. There are a lot of shitcoins that have a billion market cap, but only have $50k daily volume, and maybe $10 million of actual $$ that went into it. 

It works the same way when people say dropping X dollars doesnt matter because the market cap is 10000x.  

It's just different.  I know that sounds like a cop out, and cryptoland is full of those explanations of "you just don't understand it" stuff. This isn't one of those, as market cap is pretty easily defined.  It just doesn't describe a crypto that well.  Also, there are no rules against pumping your own coins, so you could make the market cap of your coin be $1 billion using only a fraction of that in actual flow.  And with premined/no-mine coins all around, it is really easy to bump up the market cap of your coins, and thus the market.

So when they said the crypto market cap was $500 billion, someone was throwing around numbers of around $10 billion in actual flows into the crypto space.

pods

In reply to by manofthenorth

BallAndChained exlcus Mon, 02/05/2018 - 16:08 Permalink

> I really don't understand the hate on this board for bitcoin. Do you guys not get that the whole point of bitcoin was to give the middle finger to the central banks? 

Repeated many times before, two SCAMs don't make a right! But the people living in fantasy land just can't get that through their thick skulls.

The delusional people think that imaginary coins created out of thin air with unlimited supply is honest money. With the majority of those imaginary coins owned by a few people at the top of the Pyramid who paid nothing for it. How is that fair and honest?

Anybody with half a brain would know that anything based on thin air is not honest money. Bernie Madoff was selling the same thin air NOTHINGNESS.

Blockchain gold is vastly more honest than Blockchain NOTHINGNESS. A rare hard asset that can't be forked into existence, and the supply can't be increased by a programmer changing a number using a text editor. Real immutable instead of fake immutable and fake rarity of Bitcon. Honest money is something that can't pop out of nowhere just by running FREE open source code.

Not long from now if not already, people will realize how insanely crazy people were for expecting an imaginary coin with endless supply to be worth $1 million dollars. Total lunacy.

In reply to by exlcus

exlcus BallAndChained Mon, 02/05/2018 - 16:18 Permalink

I do apologize but your repetitive use of the word endless supply shows you have no idea how cryptos work.

It's about the community. We have created a community of people of all ages, all races, and all countries who want an alternative to the established financial system and have agreed on the ground rules. And we're millions strong. What have you done?

In reply to by BallAndChained

BallAndChained exlcus Mon, 02/05/2018 - 16:52 Permalink

> I do apologize but your repetitive use of the word endless supply shows you have no idea how cryptos work.

That is one of the many LIES you scammers keep repeating. You keep fantasizing that nobody but you pumpers know how cryptos work. The same spiel that you read from the pumper's handbook calling anybody who doesn't hold an imaginary coin as ignorant. Total Bullcrap.

Over 1500 cryptos and growing as fast as greed can grow.

Your fake rarity labeling thin air a different name like Ether, Bitcon, CrapCoin, doesn't make thin air any more rare.

> And we're millions strong.

Those millions strong are dumping like crazy if you haven't noticed reality. You're deluding yourself that network effect will pay you back all your losses on a scam. A lot of influential people were buying Bernie Madoff's Ponzi too. Coincidently, Bitcon and Madoff's Ponzi are both based on thin air.

In reply to by exlcus

exlcus BallAndChained Mon, 02/05/2018 - 17:23 Permalink

So if another shitcoin comes out tomorrow, and it will, the value of Bitcoin should go down, or somehow more Bitcoins are created in your mind? 

Look I got into Bitcoin out of principle, not for the profit. The nice thing is that I have made a lot of money over the years. I've already cashed out enough long before today to ensure that. A little drop, a big drop, in USD price, I don't care.

What matters is acceptance, and that's at an all-time high, and growing every day.

Some people like you will never get it, and that's ok, that doesn't bother me either. We accomplished something here already. Crypto has helped to red pill millions of people. No matter what happens to crypto, that can't be undone.

In reply to by BallAndChained

BallAndChained exlcus Mon, 02/05/2018 - 18:14 Permalink

> So if another shitcoin comes out tomorrow, and it will, the value of Bitcoin should go down

When you saturate the market with more thin air, then yes it indirectly makes all other thin air go down. I'm not interested in your fake Bitcon rarity using a text editor to write 21 million. Like I said before, labeling thin air a different name doesn't make it any rarer.

> Look I got into Bitcoin out of principle,

Your principle is a scam based on thin air, the same thin air Bernie Madoff sold.

You profited from scamming other people who lost their money. Some people lost (or will lose) their life savings because of you.

I know you will then repeat from the pumpers handbook (again!) that fiat is a thin air scam too. But as repeated many times before, two scams don't make a right.

If you really were interested in PRINCIPLE, you would be advocating Blockchain gold or Blockchain some other hard asset that can't be created out of nothing. But you won't do that because scams are more profitable for you. It is easier to create a scam out of thin air and then hype it up and fool people with techno babble, where fundamentals don't exist.

In reply to by exlcus

BallAndChained IH8OBAMA Mon, 02/05/2018 - 15:48 Permalink

> a report from Chinese media that China will block all websites related to cryptocurrency trading and initial coin offerings (ICOs) – including foreign platforms – in a bid to finally quash the market completely

But, but, the pumpers guaranteed that the governments can't touch this!

How is the network effect going to refund everybody's losses when the network is selling like crazy?

In reply to by IH8OBAMA

pods Baron von Bud Mon, 02/05/2018 - 10:47 Permalink

Sorry, I have a RAGING hard on about this. Just checked Fleabay and some rigs are coming up for sale. Prices are still way out of whack, but not as bad as the 3rd party sellers for new GPUs.

Newegg got in some RX580's this weekend and put them on sale too. Granted, it was 150% of MSRP but they got stock in. 

My plans are all coming together. Should have a small farm up and running in a couple of months.

Come on baby, keep crashing.

pods

In reply to by Baron von Bud

pods tmosley Mon, 02/05/2018 - 11:22 Permalink

Yep, Nvidia is really moving forward with AI using their GPUs.

I dont have enough yet that I wouldn't be able to use them. Well, maybe dump a couple. But I can build a couple of theater systems and systems for the kids with what I have so far.  The GPUs are pretty amazing just in design and construction.

Actually, this mining thing has gotten me back into PC building, well, at least the mindset.  There is some new tech out there that is pretty cool. Set up an M.2 NVMe drive for my hard drive. Thing is lightning fast.  It's nice to get back into building again.

pods

In reply to by tmosley

pods TheReplacement Mon, 02/05/2018 - 13:33 Permalink

yeah, I could run 7 on my boards using that, but also can run a splitter off the x16 slots too (havent tried that yet, and heard mixed reviews).  So I could run 12 total I think on 1 board. But I would rather limit things to 6 a board, that way when there is a crash, only a small fraction of my hash gets dumped.  PSU's are also cheap when sizing for 6 per setup.

The problem is GPUs. I refuse to buy at 200-300% of MSRP. Fuck that. Newegg had RX580s "on sale" this weekend for $439. Sold out in a day. Before their sale even ended. So there is still demand, but no way am I paying 2x for a card right now, especially an AMD.  A $250 card for almost twice that?  No thanks.

I snipe them when I can, scoring 1070s for ~$500 a pop.  In a couple of months, there will be some easy pickings if this keeps up.  I mine Equihash and the 1070's kick ass on that.  3.5-4 sols/w.

pods

In reply to by TheReplacement

pods Justin Case Mon, 02/05/2018 - 13:40 Permalink

I picked up the NVMe's for ~$50 each I think.  128 gig. Ram for ~$50 (4 gig), went with a cheap pentium G4400 cause I dont do any cpu mining, and wanted to run as efficient a setup in terms of power.

Funny thing, I installed win 10 on a stick, and eventhough it says "activate windows" on the desktop, it still runs. Ill buy it if needed, but I read an article where a guy ran it without ever activating it, and it kept going. lol.  Ill buy if needed, as Win 10 actually seems to be a pretty solid OS. Lightning fast on the NVME too.

I have spare room for 4 more GPUs on the setups I have now. Just have to wait for prices to drop on the 1070s.  I scored a bunch of 1060 (3 gb) for MSRP, which is fine for what I mine. They are around because the DAG for ETH is going to make them obsolete soon.  Idk, if I mined ETH, I would be more worried about PoS.

It's fun stuff though. 

pods

In reply to by Justin Case