Bitcoin prices crashed on Thursday in a sell off that also saw other digital assets crash, bringing to light the speculation on sustainability of such a boom otherwise seen lately.
On Thursday, Bitcoin crashed heavily by as much as 14 percent, its largest downside since the coronavirus led fall in March. The scene was witnessed just when the largest digital currency was just $7 away from its all time high price of $19511. Concerns relating to stronger crypto regulation and profit taking are the reasons cited for the huge drag.
The sell-off was triggered after Coinbase said in a tweet that the US is considering a speculation on new rules that would undermine anonymity in digital transactions.
"News that the Trump administration may clamp down on crypto might have been a trigger for the drop," said Antoni Trenchev, managing partner of Nexo in London, which bills itself as the world's biggest digital-coin lender. "But any asset that rallies 75% in 2 months and 260% from the March lows is allowed to undergo a correction."
Other coins including XRP tumbled as much as 27%, according to prices compiled by Bloomberg.
"Conditions are very massively overbought and bound for a correction," said Vijay Ayyar, head of business development with crypto exchange Luno in Singapore. "So I don't think it's unusual."
The enthusiast or experts in the field that cryptos being serving as an hedge to dollar weakness and their likely purchase by retail investors, institutions and even billionaires amid the pandemic are some of the reasons why the boom can last.