Bitcoin’s value hit a record high of $19,666 on Sunday.
Bitcoin fell more than 10 per cent on Wednesday to a one-week low of $15,800 at cryptocurrency exchange Bitstamp, losing almost one-fifth of its value from a peak hit just three days ago. The digital currency has been sliding since it reached a record high of $19,666 on Sunday, when the exchange giant CME Group launched bitcoin futures, one week after its rival Cboe Global Markets listed the world’s first bitcoin futures. Immediately after CBOE introduced Bitcoin futures on December 10, its price jumped more than 20 per cent in their eagerly anticipated US debut.
Here are 10 things to know:
1) Bitcoin is a digital or virtual currency that largely exists online. No government or traditional banks print it and it has no physical appearance anywhere in the world.
2) The bitcoin’s monumental gains this year – its price has soared about 19 times – have spurred caution and alarm among some policymakers.
3) Widening its probe into bitcoin investments and trade, the Income Tax (IT) Department is set to issue notices to 4 to 5 lakh high net worth individuals (HNI) across the country who were trading on the exchanges of this unregulated virtual currency.
4) The income tax department, news agency Press Trust of India reported citing official sources, found that out of the estimated 20 lakh entities registered on these exchanges, about 4 to 5 lakh were “operational” and indulging in transactions and investments.
5) The Reserve Bank of India (RBI) had earlier this month cautioned the users, holders and traders of Bitcoins about the security related risks associated in dealing with such virtual currencies (VCs). The RBI reiterated its stand that “it has not given any licence or authorisation to any entity or company to operate such schemes or deal with Bitcoin or any VC”.
6) The booming cryptocurrencies market offers great hope, but also presents security risks and concerns, the US said on Tuesday. “We do not have a formal position on block-chain currencies and cryptocurrencies at this point. Block-chain technologies operate in a way that there’s, I guess, great hope and promise. They also present some security risks and concern for us,” White House Homeland Security Advisor Tom Bossert told reporters at a news conference.
7) Singapore’s central bank on Tuesday issued a warning against investment in cryptocurrencies, saying it considers the recent surge in their prices to be driven by speculation and that the risk of a sharp fall in prices is high.
8) South Korea’s Financial Supervisory Service said on Tuesday it does not consider bitcoin and other cryptocurrencies to be currencies of any kind. Japanese Finance Minister Taro Aso said on Tuesday that bitcoin had not been proven as a credible currency.
9) Bitcoin was invented by an unknown person or group of people under the name Satoshi Nakamoto and was released as open-source software in 2009.
10) Despite many attempts to find the creator of bitcoin, and a number of claims, it’s still not known who Satoshi Nakamoto is, or was. It is not clear whether Satoshi Nakamoto, assumed to be a pseudonym, was a name used by a group of developers or by one individual.
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