The penny dropped for cryptocurrencies like Bitcoin on Wednesday as prices plummeted on bad news from Google, international regulators and Congress. Major cryptocurrencies fell by double-digit percentages on legitimate markets Wednesday after a triple whammy of adverse developments: Google announced that it will ban cryptocurrency-related ads, the International Monetary Fund called for a worldwide regulatory crackdown on cryptocurrencies, and members of Congress clobbered them at a hearing on Wednesday.
Bitcoin dropped by more than 16 percent in 24 hours on the Luxembourg-based Bitstamp exchange, falling from $9,346 to $7,831 on Wednesday night. Litecoin, another popular cryptocurrency, lost 13 percent, settling at $155, and Ethereum plunged by more than 17 percent, to $582.
Cryptocurrencies are money in digital form that investors buy and sell on unregulated, mostly decentralized markets. They’re tracked on blockchains — multiple copies of digital ledgers that are preserved on networks of computers and servers distributed around the world.
The value of a cryptocurrency isn’t confirmed by third parties, like governments, the way the U.S. Treasury guarantees the value of the dollar. Its value is recorded and verified at the time you buy or sell it on those blockchain ledgers, which are open for anyone to review.
Without government regulation, cryptocurrencies can fluctuate massively from day to day, and the digital mechanisms behind them are regularly hacked by cybercriminals. They’re particularly vulnerable to manipulation by fraudulent advertising and scam artists, which has put pressure on companies like Facebook and Google to take action. Read more from nbcnews.com…
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