Bitcoin Bears Show Their Claws

Bitcoin suffered sharp losses in early trading on Tuesday, falling below the key $10,000 psychological level and reaching as low as $9,710 on the Luxembourg-based Bitstamp exchange. Meanwhile, leading altcoins followed suit, with Ethereum and Litecoin also posting substantial losses.

Bitcoin had climbed as high as $13,880 on June 26th, marking its highest levels since January of 2018, before its dramatic price reversal this week.

Celebrated economist and notorious bitcoin bear Nouriel Roubini, who earned the moniker ‘Dr. Doom’ made the following comments early on Tuesday;

“Indeed Bitcoin is now down below 10k. Has lost a third of its value in less than a week. Still a long way to less than zero as its true value is negative not zero given its toxic externalities! It will get to zero in due time.”

After reaching an all time high of $19,783 in December of 2017, Bitcoin endured heavy losses in 2018 that saw its value drop by 70%. However, so far in 2019 bitcoin has made a major recovery amid a resurgence of confidence in cryptocurrencies.

The recent upward move in Bitcoin was fueled by the news announcing Facebook’s Libra cryptocurrency. Libra will allow users to make purchases or send money to people with nearly zero fees and is expected to launch in the first half of 2020. Early backers of the digital currency include Uber, Spotify and Visa.

A household name like Facebook entering into the world of cryptocurrencies has helped to give a sense of legitimacy to the sector. However, central bankers have warned that Facebook should expect careful regulatory scrutiny of its new cryptocurrency.