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Bitcoin bloodbath -- cryptocurrency plunges 20% in two days

Bitcoin investors are getting their digital butts kicked lately. Hard. Bitcoin prices have plunged more than...

Posted: Sep 6, 2018 5:47 PM
Updated: Sep 6, 2018 5:48 PM

Bitcoin investors are getting their digital butts kicked lately. Hard. Bitcoin prices have plunged more than 20% in the past two days.

Ethereum, Litecoin, Ripple and other cryptocurrencies have suffered similarly large drops. The reason for the latest pullback? A Business Insider report that investment banking giant Goldman Sachs may be dropping plans to launch a crypto trading desk.

Goldman Sachs told CNNMoney though that it hadn't made a firm decision about bitcoin or other cryptocurrencies just yet.

"In response to client interest in various digital products, we are exploring how best to serve them in the space. At this point, we have not reached a conclusion on the scope of our digital asset offering," Goldman Sachs said in a statement.

But if Goldman Sachs is pulling back, that is not good news.

Naeem Aslam, chief market analyst with ThinkMarkets UK who is bullish on bitcoin, said in an email that "there is no doubt that the bitcoin price is supported by this hype that institutional banks are going to get involved."

Stories first surfaced about a possible Goldman Sachs push into bitcoin and other cryptocurrencies last December, shortly after the two big futures trading companies -- the CBOE and CME -- set up exchanges for bitcoin contracts.

Goldman Sachs confirmed in May that it was thinking of using its own money to start trading bitcoin, according to the New York Times.

Bitcoin prices, which were hovering near a record high of about $20,000 in December, have lost more than two-thirds of their value since then and currently trading at around $6,400.

Hussein Sayed, chief market strategist at currency brokerage FXTM said in a report Thursday that it's possible prices could fall below $5,000.

So it might make sense for Goldman Sachs to take a more cautious approach to this extremely volatile market. Most of the news about bitcoin has been negative lately.

Google, Facebook and Twitter have banned some cryptocurrency ads.

The Securities and Exchange Commission blocked several proposals for bitcoin exchange-traded funds in the past few months, including plans from ETF giants ProShares and Direxion and one backed by the Winklevoss brothers of Facebook fame.

Several publicly traded companies have also tried to latch onto the crypto craze, leading to more concerns that bitcoin could be a bubble. Overstock has de-emphasized much of its struggling online retail business to focus on cryptocurrencies.

Bioptix, a maker of hormones for farm animals, changed its name to Riot Blockchain. The stock surged -- until the company disclosed the SEC was probing it.

Beverage company Long Island Iced Tea morphed into Long Blockchain. It's since been delisted by the Nasdaq and now trades as a so-called bulletin board stock at a price below 20 cents a share.

Some companies also began selling digital tokens through initial coin offerings to raise money.

Eastman Kodak -- yes, the camera and film company -- created its own KodakCoin. There's even a PotCoin for the legal marijuana and cannabis industry.

Many of these initial coin offerings are legitimate. But there have been scams too. The SEC even created a fake ICO called HoweyCoins to show how easy it is for investors to get duped.

And several titans of business have blasted bitcoin as well.

JPMorgan Chase CEO Jamie Dimon has called bitcoin a "fraud" that was only good for drug dealers and North Korea.

Billionaire investor Saudi Prince Alwaleed, whose Kingdom Holding Company owns stakes in Apple, Citigroup and Twitter, told CNBC late last year he thought bitcoin was an "Enron in the making" that will implode.

Warren Buffett and Charlie Munger of Berkshire Hathaway have also warned investors to stay away from bitcoin.

Buffett told CNBC in early May bitcoin was "probably rat poison squared" while Munger said at the Berkshire shareholder meeting that the thought of owning cryptocurrencies was "just dementia."

It's also worth noting that the recent plunge in bitcoin comes at a time when the Turkish lira, Indian rupee and Argentine peso are in freefall mode as the dollar strengthens.

So investors don't seem to be willing to bet on bitcoin as a replacement for fragile emerging markets currencies.

Still, the pullback in bitcoin comes even as more and more businesses and organizations have embraced blockchain technology, the digital ledger that keeps records of transactions in virtual currencies.

IBM is a big proponent of the blockchain. The World Bank has announced plans to launch a blockchain bond. There's even a company that wants to run a fantasy football league using blockchain. (Call me old school. But I'll stick with Yahoo for my league.)

There is a clear difference between bitcoin and blockchain. The future of money may still very well be digital, but that doesn't mean that bitcoin or the scores of other virtual currencies out there will all survive and thrive.

CNNMoney's Julia Horowitz contributed to this report.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 261167

Reported Deaths: 5713
CountyCasesDeaths
DeSoto17561191
Hinds16687329
Harrison14050202
Rankin11102217
Jackson10729188
Lee9014143
Madison8495168
Jones6607114
Forrest6135122
Lauderdale6067192
Lowndes5490120
Lafayette511794
Lamar499865
Washington4904125
Bolivar4087109
Oktibbeha403581
Panola380981
Pontotoc374757
Monroe3651106
Warren3649103
Union353263
Marshall352069
Neshoba3464154
Pearl River3422105
Leflore3090109
Lincoln304287
Sunflower290373
Hancock288461
Tate279062
Alcorn270754
Pike268180
Itawamba266662
Scott256048
Yazoo253756
Prentiss251153
Copiah247649
Tippah247550
Coahoma245954
Simpson241471
Leake236167
Grenada222471
Marion220273
Covington219072
Adams212370
Wayne208432
Winston205870
George203539
Newton197346
Attala196461
Tishomingo193861
Chickasaw188444
Jasper177838
Holmes171368
Clay164237
Tallahatchie155635
Stone149525
Clarke144762
Calhoun139922
Smith127725
Yalobusha121134
Walthall114037
Greene112929
Noxubee112225
Montgomery111236
Carroll106422
Lawrence105617
Perry104031
Amite100826
Webster95424
Tunica88221
Claiborne87825
Jefferson Davis87727
Benton84823
Humphreys84224
Kemper80020
Quitman7049
Franklin69617
Choctaw62513
Wilkinson59625
Jefferson56520
Sharkey44817
Issaquena1606
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Alabama Coronavirus Cases

Cases: 436087

Reported Deaths: 6486
CountyCasesDeaths
Jefferson63969994
Mobile31211565
Madison27851208
Tuscaloosa21233271
Montgomery19698326
Shelby19093130
Baldwin16981188
Lee13036105
Morgan12526134
Etowah11987179
Calhoun11441206
Marshall10357123
Houston8886158
Limestone827876
Cullman8203108
Elmore8120104
DeKalb7828103
Lauderdale7798103
St. Clair7763125
Talladega6394111
Walker6002177
Jackson594644
Colbert545276
Blount543986
Autauga532761
Coffee456762
Dale406883
Franklin372448
Russell349212
Chilton342873
Covington336068
Escambia330144
Dallas312096
Tallapoosa3120107
Chambers301170
Clarke293336
Pike261131
Marion251558
Lawrence250752
Winston232742
Bibb221248
Geneva208746
Marengo206529
Pickens199031
Hale182742
Barbour179337
Fayette177029
Butler172459
Cherokee164330
Henry158224
Monroe151320
Randolph144336
Washington140127
Clay129146
Crenshaw122944
Macon120937
Cleburne120724
Lamar119721
Lowndes113736
Wilcox106622
Bullock102228
Perry99118
Conecuh96821
Sumter90026
Greene76823
Coosa63215
Choctaw51724
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