Bitcoin Price News: Cryptocurrency bitcoin declined 10 per cent on Thursday, January 21, to a 10-day low, retreating further from its peak record highs, amid traders expressing concerns of tighter US regulation. The world's most popular cryptocurrency was last down 10.57 per cent at $31,534. Bitcoin lost nearly a quarter since touching a record $42,000 on January 8, 2021. The drop in prices against the US dollar comes amid growing fears that bitcoin is one of a number of financial market price bubbles. According to traders, concerns over the fact that U.S. President Joe Biden's administration could attempt to regulate cryptocurrencies have also weighed on the sentiment. (Also Read: Bitcoin Gains Over 5%, Touched New Record High Of $41,530 As Bull Run Continues )
During a Senate hearing on Tuesday, January 19, Janet Yellen, Biden's pick to head the US Treasury, expressed concerns that cryptocurrencies could be used to finance illegal activities. "I think many are used, at least in a transactions sense, mainly for illicit financing, and I think we really need to examine ways in which we can curtail their use and make sure that money laundering does not occur through these channels," said the former chair of the U.S. Federal Reserve.
Meanwhile, the virtual currency has had a broader bull run since October 2020, ever since US-based online payments firm PayPal allowed its customers to use bitcoin on its network. The cryptocurrency crossed the $30,000 mark for the first time on January 2, 2021, after breaching the $20,000 on December 16, 2020. The bull run was witnessed amid growing investor sentiment due to bitcoin's inflation-hedging qualities and the tendency for quick gains. (Also Read: Cryptocurrency Market Cap Touches $1 Trillion: All You Need To Know )
On January 7, the total market value of all cryptocurrencies surged above $1 trillion for the first time ever, as prices of bitcoin surged to a record high. Bitcoin climbed more than 900 per cent to $38,655, from $3,850 in March 2020, further rising to the $42,000 mark on January 8. The market cap of all cryptocurrencies had increased 10 per cent to $1.042 trillion, out of which bitcoin accounted for around 69 per cent of the total market capitalisation. Bitcoin had almost quadrupled in value surging exponentially in the past year, after entering the four-digit value for the first time in 2013.
Ever since its launch, bitcoin's journey has been filled with ups and downs as it is still not recognised as legal by many central banks. However, many banks are exploring the possibility to allow the issuance of digital currencies. Unlike a physical currency, bitcoins are created, traded, as well as distributed through a decentralized ledger system known as a blockchain.