, the flagship , was lower again today as a year-long rout showed no signs of ending.
It was down 5.686% at $3,689.01, a stark contrast with its peak last year of nearly $20,000.
Other cryptocurrencies were also lower.
During the last three months, bitcoin has fallen from $7,084.29 on 28 August and, in the past month alone, it has dropped from $6,429.69 on 28 October.
Potential credibility problem
The immediate causes of Bitcoin’s woes are a schism in its spin-off cryptocurrency,, and possible regulatory action by the US Department of Justice (DoJ), which is reportedly looking into possible manipulation of bitcoin prices by traders.
This is known, bluntly, as the “greater fool theory”, and applies across all securities that offer capital gains.
was 8.49% lower today, at $104.71, while was 6.71% down at $0.350146. lost 5.95% to $29.43.
Bitcoin Cash is itself a breakaway from Bitcoin, and was launched in August 2017. It is designed to be a swifter service that will be able to process a larger number of transactions. Now, the same sort of split, known as a “fork” in the cryptocurrency world, is dividing Bitcoin Cash into two, Bitcoin ABC and Bitcoin SV.
Such “forks” tend to be seen as bearish by cryptocurrency traders because the splintering of a well-known name, such as Bitcoin or Bitcoin Cash, may encourage outsiders to launch their own versions of cyber money, diverting demand from the established denominations.
IBM has looked at cryptocurrency
Meanwhile, Bloomberg, the financial news and information service, has reported that the DoJ is investigating the use of tether, a cryptocurrency supposedly tied to the US dollar, to support Bitcoin, an allegation levelled also against Bitfinex, an associated trading venue. Not only would such price support, which is denied by Tether and Bitfinex, be highly irregular at the very least, but doubts have been raised as to whether Tether is, as it claims, backed by a reserve of.
There is an irony in Tether’s insistence that it has dollar backing, in that enthusiasts for cryptocurrencies have long promoted them on the basis that they are more trustworthy than paper money issued by central banks. This, they say, is because the blockchain technology that generates cryptocurrencies puts an unbreakable limit on the number of “coins” that can be produced, guarding against inflation and maintaining the currencies’ values.
Computer gianthas explored the idea of lunching its own cryptocurrency, in partnership with a tech start-up called Stronghold, which would be backed by dollar reserves.