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Bearish on Bitcoin: Crypto Markets Take Steep Dive (#GotBitcoin?)

Digital currency down 76% from last year’s peak as SEC scrutinizes industry.

Bitcoin is going from bad to worse.

A selloff that started last week picked up speed Monday, sending the price of the digital currency below $5,000 for the first time since October 2017. The latest slide leaves bitcoin down about 76% from its all-time high of roughly $19,800 in December.

Bitcoin fell about 14% to $4,781 on Monday, according to CoinDesk. Other cryptocurrencies were also down. Ether fell 16%, and EOS was down 12%, according to CoinMarketCap. Ninety-eight of the top 100 cryptocurrencies were in the red.

Cryptocurrencies are one of the most speculative asset classes in the markets, so sharp selloffs are not uncommon. But bitcoin’s slide, after several months of being relatively flat, could scare away potential investors. In the decade since it was created, bitcoin has generated lots of hype but has struggled to attract rank-and-file retail investors beyond the manic, and temporary, rallies.

The Securities and Exchange Commission has signaled it plans to get tougher on a part of the market called initial coin offerings. So-called ICOs allow investors to buy a bitcoin-like digital token related to a product or service a crypto company plans to develop or offer. They’re important to the market because they represent a way for crypto startups to bypass traditional funding sources to raise money.

The SEC on Friday released guidelines for the issuance and trading of ICOs. The agency also settled with two startups that had raised money through ICOs but failed to register them.

About 1,000 ICOs over the past two years raised more than $20 billion. It is not clear which, if any, the SEC may target next.

Securities regulators are also investigating digital-asset exchange ShapeShift AG and its chief executive, Erik Voorhees, one of the sector’s best-known entrepreneurs.

And developers of a cryptocurrency called Bitcoin Cash said recently they would split the currency into two competing versions, a development that sparked selling across the sector. Bitcoin Cash fell 13% Monday.

It’s also possible that bitcoin is being swept up in the wider capital-markets selloff. U.S. and European stocks were down sharply Monday, with tech shares faring the worst. That sector and crypto both tend to be more speculative than so-called “safety stocks” like utilities, one of the only sectors to rise on Monday.

“Though we’ve seen that bitcoin is usually fairly disconnected from the stock markets,” eToro analyst Mati Greenspan wrote Friday, “there have been distinct moments lately where they have moved in tandem, which leads me to believe that there can be some level of spillover.”

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