Bitcoin tumbles by almost $3,000 after nearing all-time high

Altcoins suffer larger drops in largest crypto sell-off since March

The cryptocurrency market suffered its largest crash since March on Thursday morning, triggered by a wave of profit-taking as Bitcoin approached its previous all-time high.

The world’s leading crypto fell by 14 per cent from midnight until 9AM (BST), briefly trading below $17,000 having only broken the benchmark last week.

The correction cannot be said to have come as a complete surprise to many crypto enthusiasts. The space between $19,000 and its all-time high of $19,758 was comprehensively recognised as volatile ground.

The increasing institutionalisation of Bitcoin by the likes of PayPal and Square was largely credited for the 75 per cent surge enjoyed by the crypto in the past two months. Believing this momentum would propel it yet higher, many believed it would break $20,000 by the end of the year.

Conversely, a sizable number held that a correction was due in light of the rapid rise. This week, the number of Bitcoin short positions reached its highest level since April.

The sell-off also coincided with OKEx announcing that it had reinstated withdrawals. The prominent exchange had suspended the ability for users to take funds in October after its founder was arrested by Chinese authorities in an anti-money laundering probe.

The Malta-based firm reopened withdrawals at 8AM (GMT) stating it had been found by an investigation “not to have been involved in any wrongdoing or illegal activities.”

Further piling pressure on the crypto, the CEO of another major exchange took to Twitter to voice his concerns over potentially imminent cryptocurrency regulation.

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Coinbase’s Brian Armstrong condemned the US Treasury Secretary Steven Mnuchin’s rumoured desire to introduce strict regulations on self-hosted crypto wallets before the end of the Trump presidency.

Seeking to defend what he described as the “open nature of cryptocurrency”, Armstrong stated: “This sounds like a reasonable idea on the surface, but it is a bad idea in practice because it is often impractical to collect identifying information on a recipient in the cryptoeconomy.”

The CEO maintained that the regulations supposedly being mulled by the soon-to-depart Mnuchin “would be a terrible legacy and have long standing negative impacts for the US”

By mid-afternoon Thursday, Bitcoin traded down 82 per cent at $17,251. The sell-off had an even more dramatic effect on smaller cryptocurrencies, with XRP and ETH trading down by 14.8 and 9.6 per cent, respectively.

FURTHER READING: Bitcoin faces stiff resistance in march towards new all-time high

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