Bitcoin plunges on US crackdown fears

Governments are inspecting risks around the sector more closely as the investor base widens.

Federal Reserve chairman Jerome Powell last week said Bitcoin “is a little bit like gold” in that it’s more a vehicle for speculation than making payments.

European Central Bank president Christine Lagarde in January took aim at Bitcoin’s role in facilitating criminal activity, saying the cryptocurrency has been enabling “funny business”.

Turkey’s central bank banned the use of cryptocurrencies as a form of payment from the end of this month, saying the level of anonymity behind the digital tokens brings the risk of “non-recoverable” losses.

India is expected to propose a law that bans cryptocurrencies and fines anyone trading or holding such assets.

Crypto firms are beefing up their top ranks to shape the emerging regulatory environment and tackle lingering skepticism about digital tokens.

Bitcoin’s most ardent proponents regard it as a modern-day store of value and inflation hedge, while others fear a speculative bubble is building.