Bitcoin Drops Below $10,000 Amid Regulator Crackdown Concerns

South Korea, which is the third largest trader of Bitcoin, has signalled plans to close cryptocurrency exchanges completely while Chinese regulators want to extend restrictions on over-the-counter and peer-to-peer platforms, according to Bloomberg.

The cryptocurrency dropped to a low of $9,186, a 50% decline over the past month, however it rebounded $2,000 to trade at $11,141 by close of play.

According to the Financial Times, the two derivatives markets that trade in Bitcoin futures witnessed record Bitcoin trading with approximately $325m Bitcoin futures contracts or 30,000 Bitcoins traded at CME Group and CBOE Global Markets on Tuesday. Both fell around 10% in early afternoon trading on Wednesday.

Joe Van Hecke, managing partner at Grace Hall Trading, told Bloomberg: "We get sell-offs like this fairly regularly. I think this one is more pronounced and press-worthy since it is affecting more people and the dollars at stake are greater.

"It is a great time to evaluate which of these coins have staying power, actually have utility going forward, and invest in those."

Global regulators have already weighed in on the topic of Bitcoin with Bank of England Governor Mark Carney last month warning cryptocurrencies will come under the scrutiny of regulators as bubble concerns grow.

The controversial currency exploded in 2017, rising over 1,500% from below $1,000 to finish the year at $14,156.

However, it has been in decline since the start of 2018, falling 4.8% to $13,624 on 1 January.

Bitcoin has received a mixed reaction from financial institutions with Wall Street bear and former director of the Office of Management for President Ronald Regan David Stockman stating the cryptocurrency boom would end disastrously.

"It is basically a class of really stupid speculators who have convinced themselves that trees grow to the sky," he said.

"It will burn out in a spectacular crash. All of these latter-day speculators will have their hands burned to a crisp, and they will learn the proper lesson."

However, JP Morgan Chase CEO Jamie Dimon recently went back on his comments where he labelled Bitcoin a "fraud" by claiming he believes in blockchain, the technology behind the cryptocurrency.

Dimon said "I regret making" the comments in September in which he said Bitcoin was "worse than tulip bulbs".