Bitcoin Tumbles Almost 20% as Crypto Backlash Accelerates

Bitcoin tumbled for a fifth day, dropping below $7,000 for the first time since November and leading other digital tokens lower, as a backlash by banks and government regulators against the speculative frenzy that drove cryptocurrencies to dizzying heights last year picks up steam.

The biggest digital currency sank as much as 22 percent to $6,579, before trading at $7,054 as of 4:08 p.m. in New York, according to composite Bloomberg pricing. It has erased about 65 percent of its value from a record high $19,511 in December. Rival coins also retreated on Monday, with Ripple losing as much as 21 percent and Ethereum and Litecoin also weaker.

“Although no fundamental change triggered this crash, the parabolic growth this market has experienced had to slow down at some point,” Lucas Nuzzi, a senior analyst at Digital Asset Research, wrote in an email. “All that it took this time was a large lot of sell orders.”

Weeks of negative news and commercial setbacks have buffeted digital tokens. Lloyds Banking Group Plc joined a growing number of big credit-card issuers have said they’re halting purchases of cryptocurrencies on their cards, including JPMorgan Chase & Co. and Bank of America Corp. Several cited risk aversion and a desire to protect their customers.

SEC Chairman Jay Clayton said he supports efforts to bring clarity to cryptocurrency issues and that existing rules weren’t designed with such trading in mind, according to prepared remarks for a Senate Banking Committee hearing Tuesday on virtual currencies…

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