Content adapted from this Zerohedge.com article : Source
by Tyler Durden
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...
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...
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."
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.
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Thanks for sharing this @zer0hedge, it gives a great insight in to the overall price of Bitcoin through the years, and it is terrible to see that it has had such a bad start to the year.
I think that there are many reasons as to why this has happened, but it is more important to look at why its growth has been slowed so much. The main reasons that I can see are the negative press stories being over dramatised by the media, while positive stories being less shared and vocalised, which has led to an imbalance in the growth of cryptocurrencies.
I am currently running a Steemit Growth Initiative, in which I plan to help Steemit grow and its users grow by running Steemit advertising campaigns, as well as upvoting the posts of undervalued bloggers on this platform. I would greatly appreciate your support with this project! All upvotes will be put towards the project, and I am also actively seeking Steem Power Delegation. You are one of my favourite Steemians in terms of content, and I would really appreciate if you had any help to offer.
BTC is the big brother on the block. He is standing out front taking the beating from all the bullies in the neighborhood. While he is doing this, the others are protected.
Only a few alt-coins are in the mainstream radar...ETH and XRP are about the only other ones people can name. Even so, BTC is the punching bag. We all should be appreciative for what BTC does for us...it takes the blows and keeps coming back for more. This allows projects like STEEM to fly under the radar while it gets things in order. STEEM is going to slingshot to incredible heights once it starts its upward move.
I foresee a bigger move up, percentage wise, in STEEM than BTC. That said, I see BTC moving up significantly higher from these levels.
Big brother is down but not out. He will step up and kick the crap out of the bullies. Michelle Lee on CNBC might end up crying.
The fall in price of Bitcoin is no surprise really considering all the negative press that has surrounded cryptocurrancies since the beginning of the year. It is just a blip and I am sure it will start to regain its strength once all the drama has died down. People are worried and scared after what happened in Japan and then banks banning trading of cryptos in some places and not allowing you to buy it with credit cards etc.
It is a temporary setback and will soon be back on top strong again
Sounds like the Chinese just need to utilize Tor OBFS4 and a decentralized exchange like Bitshares.
There's also currencies like XSPEC (SprectreCoin) with Tor OBFS4 support natively built-in to the wallet. Thus preventing national firewalls from restricting its use.
The fact that BTS/CHY is expanding like crazy means that the Chinese already are using BTS.
I imagine once word starts to spread, that will be a commonly used pair.
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.
Cryptocurrency's first mainstream adoption phase recession. Liken this phase to buying equities/real estate in 2008/2009. Still suspect a drop to $4-5k level is on the horizon, but long term I would not want to be caught with my pants down shorting Bitcoin. BTC and broad crypto market will be materially higher this year and next, play accordingly.
It's so absurd watching all this going on in China. This is what happens in a country where all decisions are dictated by one leader. This is a huge decision affecting very many of their investors and people who had started improving their standards of living through cryptocurrency.
Although trading is still going on on overseas platforms that are still being used in participating in virtual currency transactions, the government is closing down on them too. This is so sad, I hope the people would protest this injustice done to them.
There are other ways illicit activities can be stopped other than banning cryptocurrency.
Incorrect...they can be slowed but not stopped. Messing with exchanges is only a temporary measure. As I stated in a comment elsewhere, on BTS, the BTS/CNY pair is one of the most active. This shows the Chinese people are already finding a way around things...
The mainstream media is just eating this all up. They love bitcoin to get hammered. Of course, the recent move down of the dow has their attention diverted.
What is interesting is that BTC is looking like it might be bottoming. Are we in for a hard reversal. Cryptos are known for that especially BTC. Over time, it is a like a rubber band, the further you pull it back, the more it goes flying forward.
I have a feeling we will see BTC run up from these levels to the $25K area.
These are worrisome news, horrible from the perspective of growing some good projects that were coming out.
This scares even more people and the effects are being felt, with BTC road to 5k...there is to much panic sellers right now on the market, probably people that are not very informed or are just in it for the profits and didn´t made their research on the technology behind the crypto markets.
Although long-term signals indicate that the upward jump is imminent, until the current bitcoin price move shows incidentally that further bearish momentum is also possible. As of yesterday, the price of the Betcairn seems to have dropped slightly below the direct upward trend line of the low level at $ 7,000, along with the downward trend line at around $ 12,000 that bitcoin seems to have broken earlier in the day.
If the price is unable to recover above the above mentioned trend lines, it is very likely that tests for the recent decline will occur at around $ 7,000. If the 7,000 barrier fails, the deviation towards the 23.6% track range test, which ranges between $ 5,000 and $ 6,000, is likely to occur, which may accelerate the trend line of the $ 1,800 range test in July Last year available.
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.
I don't hate bitcoin, it's not a coin I buy anymore because of the fees and wait time. I do hate the fact its downfall is taking all the alts and steem with it
HODL
there are people who are centroling all this ...
Absolutely...this type of fud news is constantly hitting the headlines for a reason.
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 $1, I really don't care. It's the best antidote to central banks around. (And yes I own some physical gold and silver but bitcoin works in the real economy a lot better than gold or silver does.)
A ledger that tracks every exchange can only serve those with the means to evaluate the total volume and adjust accordingly.
All crypto is an order of magnitude more transparent than even credit or debit as it fails to evade even direct to cash exchanges. It has to be moved through another layer to then be reverted to cash.
As the individual lacks the time and typically the resources to evaluate the data, only those already tracking objects like google adsense, alexa web traffic, Twitter keywords, and Facebook ad revenue can benefit disproportionately in predictive analysis.
If I were big business, crypto is exactly what I would want to gain yet another advantage over my competitors, and you can see that in how it is pushed everywhere that skeptics to the system are frequenting.
Those who historically were all cash, barter, and precious metals are now also letting their ledgers be opened .thanks for sharing
in my opinion it will go down to 6000/6100$, it is highly possible. Otherwise i think we have good time to buy good coins now - such as ICON or NANO, huge discount.
I think those coins will do well. That's why I browser mine and get Nano.
I think fell down temporally, will rise soon, I in it believe and hope.because I love bitcoin, thank you to you for a post I like your posts
Well, its not bad as 2015's start. That was something.
I have a feeling the end of the year will be much better.
It is $6500 now , i hope we touched the bottom but we don't know yet . It may go down below $5500 . But I am not going to sell , no way because i know it will bounce back to a new all time high in near future .
Only things i could do right now is to Hodl and buy some more , convert some fiat into cryptros . Lets see how events turn out from here !
According to the firm Autonomous Next, the number of hedge funds investing in digital assets like Bitcoin has grown rapidly to more than 100. Since the launch of Bitcoin Futures on the Chicago Mercantile Exchange in December 2017, it shouldn’t be a surprise to anyone why the price of Bitcoin is down 50% from the high.
bitcoin.PNG
Only Retail Investors chase price and buy high and sell low, while the Professionals buy low and sell high. The Hedge Funds have purposely sold Bitcoin futures to get in a better price.
At the moment, there is a war taking place between the buyers (Hedge Funds) and the sellers (Retail Investors) called capitulation. That line in the sand was at $9000. Capitulation is when investors give up any previous gains, by selling, in an effort to get out of the market. Capitulations are outcomes that result from the maximum psychological and financial pain that can be endured by a group before throwing in the towel. The Retail Investors are throwing in the towel after seeing a more than 50% correction in the Bitcoin price to the buyers, the Hedge Funds. With 100s of millions of dollars to invest, we are witnessing an accumulation phase by the Hedge Funds between $6000 and $9000.
The Hedge Funds are loading up and buying from the Retail Investors. But to fill all their buy orders, as the sell orders dry up, price must go down to the next stack of sell orders. We are approaching what I believe will be the bottom of bitcoin at $6000. My first target is $12,000 and my second target is $17,000 over the next 3 - 9 months.
The easy money has been made over the last 12-18 months. With the big boys in the game now, the rules have changes. The question is, are you ready to play to win with a new play book?
This post is my personal opinion. I’m not a financial advisor. Do your own research before making investment decisions. By reading this post, you acknowledge and accept full responsibility of any gains or losses.
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