Bitcoin value dives after President Joe Biden’s pick to head Treasury spooks investors

The price of bitcoin plunged more than 10 per cent on Thursday amid fears of a US regulatory crackdown on the controversial cryptocurrency.

Janet Yellen, President Joe Biden’s pick to head the Treasury, gave investors the jitters when she voiced worries this week that the anonymous currency could be used by criminals – provoking fears of a regulatory clampdown under the Biden administration.

“I think many are used, at least in a transactions sense, mainly for illicit financing, and I think we really need to examine ways in which we can curtail their use and make sure that money laundering does not occur through these channels,” Ms Yellen said.

Bitcoin hit an all-time high of $US42,000 ($A54,000) per coin on January 8, but has since lost more than a quarter of its value, recently trading below the $US32,000 ($A41,000) mark on Thursday, according to Coindesk. While some investors have taken out profits, sceptics have raised concerns that it’s a bubble ready to pop.

Earlier this month, Britain’s financial watchdog warned crypto traders that they “should be prepared to lose all their money” because there are so many risks involved.

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Guggenheim Partners chief investment officer Scott Minerd said in an interview with CNBC that he thinks the token’s price has topped out for now, noting that it might slide all the way back down to the $US20,000 ($A26,000) mark.

“For the time being, we have probably put in a top for bitcoin for the next year or so,” he said.

Last month, Mr Minerd said bitcoin “should be worth $US400,000 ($A515,000)”, telling Bloomberg that it “has a lot of the attributes of gold and at the same time has an unusual value in terms of transactions”.

Institutional investors have helped drive up the cryptocurrency’s price in recent weeks amid growing perceptions that it offers protection against inflation and could even become an alternative to gold.

BlackRock on Wednesday authorised two of its funds to invest in bitcoin futures, bringing the token to the world’s largest asset manager.

In an SEC filing it said it could use bitcoin derivatives for its funds BlackRock Strategic Income Opportunities and BlackRock Global Allocation Fund.

This article was originally published on the New York Post and was reproduced here with permission

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