The price of the cryptocurrency, bitcoin, has plummeted to a six-week low this Tuesday, following concerns of an impending Chinese crackdown on the digital currency market. In addition, the market value for the popular cryptocurrencies, ripple, and ethereum, has also dropped substantially.
Market capitalization site, CoinMarketCap, currently puts ethereum trading at $1,051.83, having dipped 20 percent in the last 24 hours. Ripple fell 27 percent to £1.33 a token.
According to digital exchange, Coinbase, Bitcoin saw its value plummet below $12 thousand, marking the first time the cryptocurrency fell in such a way since December 5.
CoinMarketCap is not taking South Korean exchanges into price calculation anymore due to “extreme divergence” in prices compared to the rest of the world.
Chinese authorities have been exploring the possibility of regulating cryptocurrencies, including blocking domestic access to Chinese and offshore digital currency platforms. The reason reportedly is to allow centralized trading. Regulators are said to impose strict rules on individuals that specialize in market-making, settlement and clearing services for centralized trading, according to several media sources.
Media sources claim that South Korea is planning to introduce a bill that will ban exchanges that focus on cryptocurrency trading. The rumors only affected digital currency prices for the worse. However, the South Korean government announced on Monday that it would consider all possible angles regarding their cryptocurrency exchanges before making a decision.
Iqbal Gandham, UK managing director at eToro, a social trading brokerage company, states that the low figures likely stem from investor fears of a potential Chinese crackdown on cryptocurrencies. However, Gandham does not think this latest dive will affect bitcoin in the future.
“Bitcoin, in particular, has gone through this cycle before… Moreover, if you look at the last three years, January is typically the low point for cryptocurrencies.” Gandham added.
Bitcoin prices skyrocketed to 19,343 in December, a symptom likely caused by the introduction of future contracts courtesy of market company CME and the Cboe options exchange.
This month saw Cboe’s bitcoin futures trade at $11.700 Tuesday, while CME’s contracts were trading at $11,675, which were down 15 and 16 percent respectively.
Image Source: Pexels