The leading cryptocurrency and many of its rivals have declined at an alarming rate today.
Bitcoin has been steadily dropping in value over the past few weeks, a surprising contrast to the tremendous growth it saw last year. It now sits at $12,157 after a rough 24 hours that saw its value plummet from $14,000 down to $11,400. That’s a 40 percent decrease from its record-high price of around $20,000, which it reached exactly one month ago.
Other cryptocurrencies saw even sharper declines. Etherium, the third-most valuable cryptocurrency and arguably Bitcoin’s biggest rival, fell 20 percent to $1,134. Dash, Zcash, Monero, and the famed Dogecoin, among others, all plunged between 15 to 25 percent in the past 24 hours. Only three cryptocurrencies in Coinmarketcap’s top 100—Tether, Ethos, and Neblio—are in the green.
A cryptocurrency is a form of digital money that isn’t regulated by banks or the government. It uses cryptography techniques to ensure secure transactions and control the creation of new units.
Often caused by government regulation, these periods of decline are a worrying indication of the market’s volatility. This isn’t the first time we’ve seen Bitcoin falter. In September, reports that China would stop exchange trading of cryptocurrency caused the digital coin to drop 40 percent in one month. But for every trough was a peak that went tenfold in the other direction, keeping Bitcoin on its momentous course.
It’s not clear what’s causing this latest price drop but it appears to be the same story as before. A report published yesterday by Bloomberg said China was clamping down on online platforms and mobile apps that offered cryptocurrency trading services. China is also reportedly driving out Bitcoin miners, a group estimated to produce two-thirds of the world’s Bitcoin supply. A leaked memo says Bitcoin miners should make an “orderly exit” from the country because they are using too many of its resources.
South Korea, another large cryptocurrency market, is also considering stricter regulation. Finance Minister Kim Dong-yeon told Korean radio station TBS that banning digital currency trading in the country was a “live option.”
“The finance minister made it clear they’re definitely considering banning crypto trading — and it’s probably the third-largest market,” Neil Wilson, a senior market analyst at ETX Capital, told Bloomberg. “The news is hitting prices and broader sentiment, and it follows China’s move to shutter mines.”
Many cryptocurrencies, including Bitcoin, appear to be slowly regaining their footing, suggesting today’s fall is just another track on the rollercoaster, not the bubble some critics believe is ready to burst.