What happens to bitcoin now after the plunge?

After falling to four digits earlier Wednesday, Bitcoin prices rebounded above $11,200 as some investors bought into the dip.

"There is a lot of panic in the market". The reason behind why the value drops varies.

"But while the rally phase is over, I don't think it is right to say bitcoin is finished". Other cryptocurrencies such as Ethereum and Ripple have also dropped in value.

It is notoriously hard to be certain of what causes moves in Bitcoin's value - the asset has been much more volatile than most traditional currencies and commodities to date - but speculation that regulators may be about to restrict trade has been causing concern.

"The January drop is a recurring theme in cryptocurrencies as people celebrating the Chinese New Year, aka Lunar New Year, exchange their crypto for fiat currency", said Alexander Wallin, chief executive of trading social network SprinkleBit in NY. On January 15, a major correction hit the cryptocurrency market and the vast majority of cryptocurrencies in the market plunged in value.

The value of bitcoin was as low as $10,567 on the Luxembourg-based Bitstamp exchange, from its peak value of $20,000 last December. The talk has been around two of the biggest players China and South Korea which have been having a talk of completely banning cryptocurrency trading.

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The influential investor Warren Buffett has also made negative pronouncements about Bitcoin and other virtual currencies, and has steered clear of them when making purchases for his Berkshire Hathaway investment fund.

Prices of bitcoin and other digital currencies skidded after South Korea's top financial policymaker said Tuesday that a crackdown on trading of cryptocurrencies was still possible. By mid-December, it hit an all-time high of nearly $20,000. "Officials are expected to debate the rise of bitcoin at the upcoming G20 summit in Argentina in March", writes Reuters. Looks like they're exhausted of overpaying for cryptos and waiting for the market to even out."Meanwhile, Peter Adeney, a financial advisor who operates under the pseudoname Mr Money Moustache, has warned against the "collective insanity" of the cryptocurrency market.He said: "You should not invest in Bitcoin".

Bitcoin Cash and Cardano, the fourth and fifth biggest digital currencies by market capitalisation, have fallen by 20.18 per cent and and 17.97 per cent, respectively.

And Go Holdings, including estate agency Go Move, covering Hertfordshire and a new homes development company, Go Homes, claimed in December 2017 to be the first agent in the world to sell a home through Bitcoin.

They claimed the trade in cryptocurrencies was being used by Chinese citizens to move cash overseas.

Cryptocurrencies such as bitcoin are powered by the technology known as blockchain, which is akin to an anonymous digital ledger.

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