Following comments from India’s minister of finance on cryptocurrency and potential price manipulation at a major cryptocurrency exchange, bitcoin dropped below $9,000 in trading on Thursday (Feb. 1) — a critical level. The cryptocurrency tumbled to $8,810 in late morning trading, CNBC reported. But, by 12:12 P.M., bitcoin rebounded slightly to $9,019.08 before sliding below $9,000 again, according to CoinDesk.
India’s Finance Minister, Arun Jaitley, said on Thursday (Feb. 1) that India “does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate use of these cryptoassets in financing illegitimate activities or as part of the payment system.” On Wednesday (Jan. 31), The New York Times reported that a number of investors are concerned that the price of bitcoin — and other cryptocurrencies — have been inflated by cryptocurrency exchange Bitfinex.
Two weeks ago, Fundstrat’s Tom Lee said $9,000 would mark a “major low” for bitcoin. At that level, the cryptocurrency might be “the biggest buying opportunity in 2018,” he said. Lee raised his year-end price target for bitcoin to $25,000. But other analysts think bitcoin could drop further — to a range between $5,605 and $5,673.
On Wednesday (Jan. 17), bitcoin hit another milestone, dipping below the $10,000 mark, Reuters reported. By early evening the same day, however, the currency had rebounded, hitting $11,153.21 at 5:25 P.M., according to CoinDesk.
Bitcoin prices hit record levels in 2017, reaching above $17,000 on the Luxembourg-based bitcoin exchange Bitstamp in December. The record high represented a 20-fold increase in value for the year.
The cryptocurrency has had its share of cynics, who warn of a bitcoin bubble. Ken Griffin, billionaire hedge fund manager, told CNBC that bitcoin smacks of tulip mania from centuries past. And, Carl Icahn, who is also in the ranks of billionaire Wall Street heavyweights, has said bitcoin “seems like a bubble” and that he prefers to stay away from investments where he cannot understand why people are bidding the price up.