Bitcoin tumbles below $10,000 and is now down 25% on the year

Bitcoin briefly fell Tuesday below the psychologically key $10,000 for the second time in a week.

The digital currency dropped more than 7 percent to a low of $9,972.29 Tuesday morning, according to CoinDesk’s bitcoin price index, which tracks prices from digital currency exchanges Bitstamp, Coinbase, itBit and Bitfinex. Bitcoin had recovered to trade near $10,246 as of 9:03 a.m., ET.

Bitcoin plunged more than 30 percent in the middle of last week, briefly falling below $10,000 to a low of $9,199.59 on CoinDesk, following concerns of increased regulation in South Korea and China. Prices had stabilized by the end of the week, but began falling again Monday.

Bitcoin this week

Source: CoinDesk

No specific driver was immediately apparent behind Tuesday’s decline, which has taken bitcoin more than 25 percent lower for the year so far. But bitcoin remains a staggering 955 percent above January 2017 levels.

“It was a bubble. It is a bubble,” Ray Dalio, founder of hedge fund giant Bridgewater Associates, told CNBC Tuesday from the World Economic Forum in Davos, Switzerland. “A perfectly good market can be in a bubble.”

“I don’t know how to value it,” Dalio said. “I believe in the blockchain technology. I think it’s great, but that notion of how to trade it and how to value it is not my expertise.”

Tuesday’s losses in bitcoin did come as more details emerged around South Korea’s efforts to limit speculation in cryptocurrencies.

The South Korean Financial Services Commission announced Tuesday that a proposed ban on anonymous trading accounts will take effect Jan. 30.

“Those who do not have their real-name accounts at the same bank with the exchanges will not be allowed to make new deposits into the exchanges’ accounts. They will be only allowed to make withdrawals,” a release said. The commission also announced guidelines for financial institutions to prevent cryptocurrency-related money laundering.

The share of bitcoin trading in South Korean won remained steady around 4.6 percent, while U.S. dollar-bitcoin trading had the largest share at 37 percent, according to CryptoCompare. The Japanese yen had the second-greatest share, near 32 percent of bitcoin trading volume.

The Cboe bitcoin futures traded slightly higher near $10,240, while the CME bitcoin futures were 1 percent lower around $10,220 Tuesday morning.

Other major digital currencies traded lower Tuesday morning, but near the prior day’s lows.

Ethereum, the second largest digital currency by market capitalization, traded more than 5 percent lower near $950, according to CoinMarketCap.

Ripple, the third largest cryptocurrency by market cap, fell more than 6.5 percent to $1.27, the website showed.

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