“It looks like the light touch that has allowed the crypto-boom to explode may be coming to an end"
Bitcoin has fallen 25% as fears of regulatory crackdowns in South Korea, China and Japan have intensified.
Bloomberg reports that Bitcoin fell as much as 25% on Tuesday to $10,338, hitting its lowest level since early December. Rival cryptocurrencies Ripple and Ethereum dropped 40% and 26% respectively.
The tumble is reportedly a result of intensified regulation fears in Asian countries including South Korea, China and Japan .
Finance Minister Kim Dong-yeon said that shutting down cryptocurrency exchanges is still an option in South Korea but would require “serious” discussion among ministries.
“The finance minister made it clear they’re definitely considering banning crypto trading — and it’s probably the third-largest market,” said ETX Capital senior market analyst Neil Wilson. “The news is hitting prices and broader sentiment, and it follows China’s move to shutter mines.”
China began its crackdown on cryptocurrencies last year but has since escalated its clampdown.
“We’ve heard reports that South Korea, China and Japan have considered a shared approach, a path, to regulation,” ETX’s Wilson said. “It looks like the light touch that has allowed the crypto-boom to explode may be coming to an end.”
Mati Greenspan, senior market analyst for eToro, said low trading in Korea and Japan may have contributed to the price movement. Bitcoin trading with Korean won was around 3.3% according to Bloomberg, compared to over 10% over the past two weeks.
Steven Maijoor, chairman of the European Securities and Markets Authority, said investors “should be prepared to lose all their money” in Bitcoin. “It has an extremely volatile value, which undermines its use as a currency,” he said. “It’s also not broadly accepted.”