Bitcoin price dove below $7,900 on Tuesday after the New York Attorney General’s office announced that it had opened an inquiry into the cryptocurrency exchange industry.
The flagship cryptocurrency had traded above $8,000 for most of the day, with many analysts arguing it would embark on a bull run now that tax season is coming to a close in the US.
However, on Tuesday afternoon the Bitcoin price took an unexpected turn, plunging from $8,090 to $7,855 in a matter of minutes on Bitfinex. At present, Bitcoin is trading at $7,877, which translates into a $134.2 billion market cap.
The drop followed the announcement that the New York Attorney General’s office had opened an inquiry into the operations of 13 cryptocurrency exchanges — some located in New York, some not. While it is unclear if the probe will result in any enforcement action, Attorney General Eric Schneiderman has a reputation as an activist official and could seek to make a statement.