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Published On: Fri, Aug 15th, 2014

Bitcoin slumps to a three-month low, further losses expected

Bitcoin fell sharply to its lowest level since May 22, as the Consumer Financial Protection Bureau warned of risks entailed by virtual currencies, causing market sentiment to slump.

Bitcoin fell sharply by 6.17% on the BitStamp exchange (Slovenia based), and traded at $509.61 in early morning US time. Before that, there was a price slump to $502.99, the lowest level reached since this spring.

There was a likelihood Bitcoin prices could find support at $492.65,the May 22 low; resistance was likely at $590.99,the high of August 11.

The Bitcoin price on BTC-e(Bulgariabased) sharply declined by 5.4 percent, equivalent to $28.97, to trade at $507.45. Earlier, prices reached $494.00.

Bitcoin is avirtual currency which is not backed by any government orcentral bank and can be used for online purchases of goods and services. The impossibility to track the transaction parties makes bitcoin the most convenient choice for illegal transactions.

At the same time, there was a 5.55 percent decline in euro-denominated Bitcoins, which resulted in a tradable price of €387.00, on the US-based Kraken Exchange.

CoinDesk Bitcoin Price Index data indicated the crypto currency price dropped by 6.28 percent to trade at $510.37. The index averages prices on major exchanges.

On August 11, the Consumer Financial Protection Bureau issued a long list of risks posed by crypto currencies, drastically souring market sentiment. The Bureau reminded consumers virtual currencies are not supported by the government. It was clearly pointed out that other risks they entail are volatile exchange rates and high likelihood of attracting hackers and scammers.

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