Lately, financial authorities around the world are speaking up about a regulating the cryptocurrency markets with an aim of trying to control the excessive enthusiasm for these new financial assets. As a result, at market opening today, Bitcoin’s value had decreased by about 40%.
The price of Bitcoin has continued to fall and has reached its lowest level since December. And now, different financial authorities around the world are threatening to impose regulations on the market. Some countries have already taken actions. Take China, who has adopted a formal ban against trading cryptocurrency on its territory. The government has even implement restrictive measures to ban ICOs and discourage the mining of Bitcoin. Given that China is home to the largest community of Bitcoin miners, this policy has struck a serious blow to the market. The Chinese government has also planned to block access to local and offshore exchanges that still allow the trade the digital currency.
A Crashing Market Cap
Today’s session saw Bitcoin start at $13,930 and peak at $14,445, just before crashing to a meager $11,500.
This brings its value back to where it was about a month ago. On December 5th, Bitcoin was at about the same price, but, was in an upward trend. It had then shot up to its current record of nearly $20,000 and saw its adoption to the CME Group and the introduction of futures contracts on the CBOE.
Now, the situation seems to be going in the opposite direction and the market, in general, is seeing loses everywhere. All 20 major cryptocurrencies are in the red today. According to CoinMarketCap, Ethereum saw declines of 14%, the Ripple lost 21% and Bitcoin dropped by 19%, all within 24 hours.
Right now, the market cap for all cryptocurrencies is at about $580 Billion. In comparison to $832 Billion just over a week ago on January 7th.
Why are the Markets Crashing?
This dramatic crash comes after Kim Dong-Yem, the South Korean Finance Minister, said that a crackdown on the trade of cryptocurrencies will be seriously considered, and soon.
In addition to the rumors of trade closure, the South Korean government has also proposed a new regulation that requires users of digital currency to identify themselves by their names. Those who do not abide by the new legislation will be liable to a fine.
Since the South Korean market of one of the world’s largest cryptocurrency markets, such a decision, could have serious repercussions on Bitcoin and other virtual currencies on other trading markets.
The Finance Minister also added that the proposal to ban the trade of cryptocurrencies would be reviewed very soon by the country’s government.
This is in conjunction with a recent statement, made by the Director of the German central bank, that called for international regulations.
Adding to the chaos, yesterday a thief hacked BlackWallet and got away with about $440,000 in loot.