Bitcoin plunges as risk sentiment weakens, breaks below $200

Bitcoin plunged on Wednesday through the psychologically important $200 mark to new lows as demand for the virtual money continued to decline with the global growth outlook weakening.

BTC/USD dropped to $152.40, down more than 30% on the day, before rebounding to $195. It was down 15% and closed at 226 on Tuesday.

At the lowest on Wednesday, the digital money was down 52% from end December and extending the downtrend since July.

In case of a closing near the $200 mark, $150 will be the next support, the break of which will shift focus to $100.

Delta Financial, the Hong Kong and Vancouver-based company that has been offering some bit coin based products, stated that it will stop the services at the end of this month.

Many analysts said the decision by Delta Financial too weighed on the virtual money. Users will also no longer be able to sell bitcoin through the platform, the company said.

"Simply put, the financial products we wanted to build on the bitcoin platform simply require a bigger trading volume than that what exists today," Delta said in the statement.

BitStamp, a bitcoin exchange, had to remain shut for four days until Friday after hackers stole nearly 19,000 bitcoins valued at approximately $5m, another recent incident that decreased investor interest in the digital coin.

The CoinDesk Bitcoin Price Index, which averages prices from the major exchanges, had fallen more than 25% to hit a low of 170 before rebounding to $198.

The World Bank on Tuesday slashed its global growth outlook and a European Court of Justice on Wednesday has ruled in favour of additional quantitative easing by the European Central Bank.

Amid these developments, risk sentiment weakened, increasing safe have demand for the dollar, which is already trading at a 12-year high against a basket of major currencies.