Bitcoin, the world’s biggest and best-known cryptocurrency, is currently trading at less than $11,300, according to CoinMarketCap – down from a high of more than $12,000 yesterday (January 28).Its coin market capitalisation is now hovering around the $190billion mark, which is far below its December peak of nearly $335billion.

Bitcoin’s growth looked unstoppable last month, when it surged from less than $3,000 to nearly $20,000 in just a few months.

But the entire crypto market has faltered since the start of the year, with bitcoin’s closest rivals Ripple and Ethereum also struggling.

The bitcoin (BTC) price tracker below shows the digital currency’s value in real time.

Why is bitcoin going down?

This latest rocky patch for bitcoin is thought to have been triggered by rumours that the Tether cryptocurrency has been artificially raising its value.

Owned by trading company Bitfinex, Tether has been criticised by financial bloggers who claim it has been plucked from thin air to boost the value of bitcoin.

Nicholas Weaver, a professor from UC Berkeley’s International Computer Science Institute has warned that a “bloodbath” would ensue if the claims turn out to be true.

Bitcoin price chartCOIN MARKET CAPBitcoin price chart: Bitcoin has lost about $12.5billion of value since yesterday

He tweeted: “At current prices, net new bitcoin requires $18million of net new dollars flowing in to maintain the price.

Without this scam Bitcoin price would collapse by 80 percent

Nouriel Roubini, a professor at Stern School

“Yet there is a net $100million a day of fake dollars in the form of Tethers…“If that tether printing press ever breaks, there will be a true bloodbath on the cryptocurrency prices. Good.”

Meanwhile, Nouriel Roubini, a professor at Stern School, said the revelations could see bitcoin plummet by as much as 80 percent.

He tweeted: “Indeed Tether/USDT used to manipulate Bitcoin prices. Without this scam Bitcoin price would collapse by 80 percent.

Bitcoin stock on virtual screen cryptocurrency graph. Business finance and digital technology concept

 

“Regulators asleep at the wheel while $2billion of fake dollars created via this scam, half of it since December. Not even North Korea created so many fake dollars backed by nothing.”Another reason for bitcoin’s woes could be a spate of recent hacks and threats from a number of governments that crypto trading could soon be heavily regulated.

It was revealed last week that hackers have been exploiting YouTube’s advertising service by targeting users to mine cryptocurrencies, including bitcoin.

A spokesman for Google said: “We enforce our policies through a multi-layered detection system across our platforms which we update as new threats emerge.

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