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How low can Bitcoin go?

It wasn’t too long ago when a company announcing plans of the slightest involvement in the world of cryptocurrencies would likely see a rapid surge in its share price.

That wasn’t the case for Fatfish Internet Group Ltd (ASX: FFG), an internet venture investment firm.

Fatfish Internet Group Ltd announced on Friday that it had completed the signing of its investment in CryptoFoundry Pte. Ltd., a Singapore based start-up that provides consultancy and technology services in blockchain and cryptocurrency technologies.

On the same day the company’s share price dropped by more than 7 per cent.

Perhaps it’s another sign that cryptocurrencies are losing their allure.

The price of Bitcoin has recovered since dropping below US$10,000 last week and is now trading for about US$12,230, according to CoinMarketCap, still a long way off the highs it was hitting of around US$20,000 a month ago.

That was before a raft of news of regulatory crackdowns, among other concerns, shook the cryptocurrency markets.

Reports of South Korean officials drafting laws to clamp down on cryptocurrency traders, the US Senate’s financial services panel preparing to probe cryptocurrencies and the Oracle of Omaha, Warren Buffett, casting a grim outlook for Bitcoin and its competitors left investors a bit jittery.

And it appears there’s more bad news for some of those with fortunes tied to cryptocurrencies as Indian tax officials prepare to claim their slice of the cryptocurrency pie.

Tax department officials in the subcontinent have sent out thousands of tax notices after data showed that cryptocurrency transactions worth more than US$3.5 billion had taken place in India in less than two years.

“We cannot turn a blind eye,” a tax official told Reuters.

“It would have been disastrous to wait until the final verdict was out on its legality.”

India is not alone.

It also seems the governments of France and Germany are planning to regulate cryptocurrencies.

With the momentum of government crackdowns building on Bitcoin and its competitors it’s likely the value of many cryptocurrencies will continue to drop.

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Motley Fool contributor Steve Holland has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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