As regulators in the U.S. and South Korea clamp down on cryptocurrencies, and investors question the stability of digital coins, bitcoin may see its worst monthly decline in value since January 2015. As of 2:02 P.M. on Wednesday (Jan. 31), bitcoin was trading at $9,975.42, according to Coindesk. By comparison, it traded at $13,412.44 on Jan. 1, CNBC reported.
Bitcoin hit a low of $9,627.89 during its most recent drop, marking a decline of slightly more than 28 percent. That figure is approaching bitcoin's approximately 30 percent dip from January 2015, the biggest monthly decline to date. It's not uncommon for bitcoin to lose value in January, as it is a historically bad month for the cryptocurrency. In fact, it has dropped during January in four out of the last five years.
Digital currencies have faced regulatory scrutiny from governments around the world, which has put pressure on bitcoin's value. On Monday, for example, news surfaced that the U.S. Securities and Exchange Commission (SEC) filed a complaint against a Dallas-based financial firm seeking to launch what might be the largest initial coin offering (ICO) in history. The complaint stated that “the ICO is an illegal offering of securities because there is no registration filed or in effect with the SEC, nor is there an applicable exemption from registration.”
In South Korea, police and tax authorities have reportedly been raiding local exchanges on alleged tax evasion charges — and the country has gone back and forth on whether it will ban the cryptocurrency altogether.
The regulatory actions come as big-name investors have expressed concern over cryptocurrencies. In an interview with CNBC, Warren Buffett, chief executive officer of Berkshire Hathaway, argued the digital cryptocurrencies “will come to a bad ending,” although he couldn’t say when that will happen.
“If I could buy a five year put on every one of the cryptocurrencies, I’d be glad to do it, but I would never short a dime’s worth,” Buffett said. “We don’t own any, we’re not short any, we’ll never have a position in them.”