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Bit­coin con­tin­ues to plunge af­ter big run-up

USA TODAY US Edition - - MONEY - Adam Shell

Bit­coin, the best-known dig­i­tal cur­rency that had jumped more than 400% this year, has lost a third of its value since the be­gin­ning of Septem­ber as in­vestors run for cover af­ter fears of a crack­down on the cryp­tocur­rency in China proved cor­rect.

Bit­coin also has been buf­feted by neg­a­tive com­ments from Wall Street giants such as J.P. Mor­gan CEO Jamie Di­mon, who on Tues­day said bit­coin was a “fraud,” and Mo­hamed El-Erian, chief eco­nomic ad­viser at Al­lianz, who told CNBC on Wed­nes­day that bit­coin should be val­ued at half or a third of where it is now trad­ing.

Bit­coin, which is seen as an al­ter­na­tive to of­fi­cial cur­ren­cies such as the dol­lar and Ja­panese yen as well as a haven-type as­set such as gold, swooned more than 13% on Thurs­day to $3,391 af­ter BTCC, an ex­change in China that trades the cryp­tocur­rency, said in a tweet it will shut down at the end of the month, con­firm­ing worst-case fears of bit­coin fans. Chi­nese au­thor­i­ties have been spooked by the spec­u­la­tive na­ture of bit­coin, as well as its use as a way for cap­i­tal to flee the coun­try, which Bei­jing wants to avoid. OKCoin and Huobi, China’s other two ma­jor bit­coin ex­changes, also are in the gov­ern­ment’s crosshairs but for now are still trad­ing bit­coin.

Since hit­ting an in­tra­day high of $4,802.74 on Sept. 1, ac­cord­ing to Dow Jones, bit­coin has plunged 30%. The drop high­lights how volatile this new cur­rency is and why it is viewed sus­pi­ciously by many on Wall Street.

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