The price of a unit of bitcoin fell more than 17% on Tuesday to $11,182 - its lowest value since 5 December. This attempt was not successful, but it was still very much under consideration on Tuesday, according to South Korean Finance Minister Kim Dong-yeon. That has added to ongoing worries about a potential crackdown in what is considered the world's third-largest crypto trading market.
China, which first began targeting the industry a year ago, is escalating its clampdown on cryptocurrency trading, particularly online platforms and mobile apps that offer exchange-like services, according to people familiar with the matter.
While the largest digital coin was down 25 per cent at US$10,338 as of 4.37 pm in NY, it was still at the lowest level since late December, according to composite pricing on Bloomberg. The cryptocurrency's market capitalization now stands at around $198 billion, according to Reuters.
Other popular cryptocurrencies ethereum and ripple also posted double-digit losses.
"Bitcoin dived below $12,000 today as it appears the regulatory noose is tightening", said Neil Wilson, senior market analyst at ETX Capital, in a note.More news: 3.2 million more Americans are without health insurance since Trump took office
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Following South Korea's decision to ban cryptocurrency trading, China's central bank expressed its plans to block all local and offshore, individuals and businesses that provide centralized cryptocurrency exchange-like services.
However, there is potentially another reason behind the current drop, which is not related to these developments.
A Bloomberg report yesterday suggested that China is preparing to block domestic internet users accessing worldwide bitcoin exchanges.
"Nothing has captured the imagination in this new fintech age quite like cryptocurrencies, specifically Bitcoin", said founder and CEO Nigel Green.
"We should expect a great deal of diversity in the way regulators will deal with cryptocurrency trading". He said: "All government ministries agree on the need for a government response to an overheating in cryptocurrency speculation and for a degree of regulation".
According to averaged exchange data from Coinmarketcap's listings, altcoins reacted considerably more sharply to Bitcoin's dip, major assets declining between 20% and 30% over the same period.