Bloodbath In Crypto Markets and Bitcoin Price on Fears of Government Crackdown

There is a bloodbath in cryptocurrency markets on fears of a crackdown by governments across the world. Apart from Tether (which has parity with the U.S. dollar), all other cryptocurrencies were in the red and had shed values in double-digits. At 14:19 UTC, the overall market valuation for cryptocurrencies tumbled to $566.2 billion, down by 20% from its value 24 hours ago.

At one point last morning, it crashed to $536.5 billion, down by 30% from its price 24 hours earlier. The price of a single bitcoin was $11,825.70, a decline of 17.27% from its price 24 hours ago.

Stellar and Ripple were the biggest losers among the top 10 most-traded cryptocurrencies, as of this writing, down by 26.19% and 25.18%, respectively. The overall declines are not uniform as the chart below shows. Even with today’s declines, three cryptocurrencies are still trading positive to their valuations last year.

Government Crackdown Spurs Declines

The prospect of a crackdown by governments in China and South Korea, among the largest trading venues for cryptocurrencies, is being cited as the primary reason for declines in prices. South Korea had threatened to ban cryptocurrency trading last year but backtracked from its stance on Sunday. Yesterday was another story, however. In a radio interview, the South Korean finance minister said shutting down cryptocurrency exchanges was still an option but that it needed “serious discussion” first.

After banning cryptocurrency exchanges in 2017, China is cracking down on other venues for trading of digital currencies. A Bloomberg report quotes unnamed sources as saying “the government plans to block domestic access to homegrown and offshore platforms that enable centralized trading.” But the report does not provide a proper definition or provide examples of such platforms.

South Korea is the world’s third-largest trading venue for cryptocurrencies after Japan and the United States. Ripple and Ethereum, the world’s second and third most-traded cryptocurrencies, owe recent spikes in their prices to trading on Bithumb, South Korea’s largest exchange…

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