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Bitcoin Plunges 14%, Crashes Below $5,000 Mark

Investing.com

Investing.com - Cryptocurrency prices plunged on Tuesday, with Bitcoin falling below the $5,000 mark for the first time in 2018.

Bitcoin plunged 13.5% to $4,930.00 by 11:05 AM ET (04:05 GMT) on the Bitifinex exchange.

XRP was down 1.2% to $0.49762 on the Poloniex exchange.

Ethereum slumped 13.9% to $150.95, while Litecoin declined 9.5% to $37.917 on the Bitifinex exchange.

The fall in prices came after the U.S. Securities and Exchange Commission announced its first penalties against two crypto companies that did not register their initial coin offerings (ICO) as securities.

The two companies, Airfox and Paragon Coin, will each have to pay penalties of $250,000 to compensate their investors, Bloomberg reported citing SEC’s statement.

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“The selloff is related to enforcement, which is almost certainly underway,” said Justin Litchfield, chief technology officer at ProChain Capital. “Projects are being made to return investor money, which, after having spent a ton of money marketing their $100 million ICO on a lavish party-filled road-show that was the norm for this vintage of ICOs, will be tough.”

The cryptocurrency industry has now lost more than $670 billion in value from a January peak, according to data from CoinMarketCap.com. Bitcoin, the largest digital currency, is now down more than 70% from its December 2017 high.

Last week, Japan’s Financial Services Agency said it plans to regulate virtual coin wallets. Currently, only companies that buy and sell digital coins are required to register with the agency.

In positive news flow, Switzerland’s authorities approved the world’s first cryptocurrency ETF, according to several reports. The crypto startup Amun AG reportedly received approval for the fund that would allow investments in major cryptocurrencies including Bitcoin, Ethereum, XRP, Litecoin and Bitcoin cash in the coming days.

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