Bitcoin briefly dropped below the $10,000 mark for the first time since its meteoric rise in 2017, as governments around the world crack down on the digital currency.
South Korea – the third-biggest market in the world for bitcoin trades – is the latest country to announce tougher regulation, saying it will tax the country’s digital currency exchanges.
The news caused a sharp fall in the price of Bitcoin from a high of $19,343 on 16 December to $9,976 at 11.48am (GMT), before recovering to $10,341 by 12.48.
The global crackdown by regulators has hit all of the major cryptocurrencies.
Ethereum, the second biggest digital currency by market capitalisation, also fell, sliding steadily to $946 by 12.45am, after hitting $1,166 in weekend trading, although earlier this month it reached an all-time high of $1,357.
‘Not an investment we would advise’
Ripple, the third largest digital currency, fell to $1.19 at 11.40am, down from $1.35 in overnight trading. On 4 January it stood at over $3.
UBS chairman Axel Weber warned today that Bitcoin and other cryptocurrencies were speculative, risky and “not an investment we would advise”.
“Clearly with Bitcoin, this is a speculative investment; I don't call it currency and retail clients do not have the risk bearing capacity nor the knowledge to invest in that,” he told CNBC at the Davos World Economic Forum.
“Retail clients, who don’t fully understand these products, should be protected from going into these products.
“If there is a retail client affected in the future, the question will be again who was the bank that sold them these products and then banks will be blamed again for what has happened.”