Bitcoin slides 18 percent on crackdown fears; crypto
rivals also plunge
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 [January 16, 2018]
By Jemima Kelly
LONDON (Reuters) - Bitcoin tumbled 18
percent on Tuesday to a four-week trough close to $11,000, after reports
that a ban on trading of cryptocurrencies in South Korea was still an
option drove fears grew of a wider regulatory crackdown.
Bitcoin's slide triggered a massive selloff across the broader
cryptocurrency market, with biggest rival Ethereum down 23 percent on
the day, according to trade website Coinmarketcap, and the next-biggest,
Ripple, plunging 33 percent.
South Korean news website Yonhap reported that Finance Minister Kim
Dong-yeon had told a local radio station that the government would be
coming up with a set of measures to clamp down on the "irrational"
cryptocurrency investment craze.
South Korea had said on Monday that its plans to ban virtual coin
exchanges had not yet been finalized, as government agencies were still
in talks to decide how to regulate the market.
Bitcoin slid on the latest news, trading as low as $11,191.59 on the
Luxembourg-based Bitstamp exchange, down 18 percent on the day, for a
short period putting the digital currency on track for its biggest
one-day fall in three years.
"It's mainly been regulatory issues which are haunting the
cryptocurrency, with news around South Korea's further crackdown on
trading the driver today," said Think Markets chief strategist Naeem
Aslam, who holds what he described as "substantial" amounts of bitcoin,
Ethereum and Ripple.
"But we maintain our stance. We do not think that the complete banning
of cryptocurrencies is possible," he said.
Cryptocurrencies enjoyed a bumper year in 2017 as mainstream investors
entered the market and as an explosion in so-called initial coin
offerings (ICOs) - digital token-based fundraising rounds - drove demand
for bitcoin and Ethereum, the second-biggest digital unit.
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A collection of Bitcoin
(virtual currency) tokens are displayed in this picture illustration
taken December 8, 2017. REUTERS/Benoit Tessier/Illustration/File
Photo
The latest tumble leaves bitcoin down more than 40 percent from the
record high around $20,000 it hit in mid-December, wiping about $130
billion off its "market cap" - the unit price multiplied by the total
number of bitcoins that have been released into the market.
The news from South Korea came as it emerged a senior Chinese central
banker had said authorities should ban centralized trading of virtual
currencies as well as individuals and businesses that provide related
services, according to an internal memo from a government meeting seen
by Reuters.
Bloomberg reported on Monday that Chinese authorities plan to block
domestic access to Chinese and offshore cryptocurrency platforms that
allow centralized trading.
"(It) seems like it's uncertainty spooking the markets,...with
regulations unclear," said Charles Hayter, founder of data analysis
website Cryptocompare. "(Traders) are taking profits on the increased
risk scenarios going forward."
A director at Germany's central bank said on Monday that any attempt to
regulate cryptocurrencies must be on a global scale as national or
regional rules would be hard to enforce on a virtual, borderless
community.
By 1000 GMT bitcoin was trading down 16 percent on the day at around
$11,500 on Bitstamp.
(Reporting by Jemima Kelly; Editing by Tommy Wilkes and Hugh Lawson)
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