Bitcoin plunged by 15% on Tuesday morning, and all of the major cryptocurrencies were also in the red. That decline came on the heels of a 17% drop in the price of bitcoin last week; the digital currency is now trading below $12,000 for the first time since early December.
Here's a rundown of Tuesday's price action in the five largest cryptocurrencies, and a look at what could be to blame for their drops.
Image Source: Getty Images.
Today's cryptocurrency prices: Jan. 16, 2018
Here's a look at the five largest cryptocurrencies by market capitalization, and how much each has changed over the past 24 hours.
Cryptocurrency Name (Code)
Price in U.S. Dollars
Bitcoin Cash (BCH)
Data Source: www.investing.com. Prices and daily changes as of 10:45am EST on 1/16/18, and prices are rounded to the nearest cent where appropriate.
As you can see, it's not just bitcoin: The rest of the top five cryptocurrencies are being crushed even harder. In fact, the overall value of the cryptocurrency market has dropped by more than $100 billion since last week.
The reason for the plunge? Fears of a crackdown of cryptocurrency trading in major international markets, and lower trading volumes in key cryptocurrency markets.
Worries about crackdowns in South Korea and China
Last week, it was reported that South Korea is considering a bill that would ban cryptocurrency trading in the country. That would be a major blow to the asset class, as South Korea is one of the most active cryptocurrency markets.
Fears seemed to subside in the days following the news. First, it was reported that a ban was just one option being considered, and then we learned that even if such a bill were to be introduced and passed, it could take months or even years before a ban could go into effect.
Well, comments from South Korean Finance Minister Kim Dong-yeon have renewed these fears. Speaking on a radio program, Dong-yeon said that "the shutdown on virtual currency exchanges is still one of the options."
Furthermore, China's crackdown on cryptocurrencies appears to be escalating. Authorities are planning to block access to cryptocurrency platforms that allow centralized trading, and Chinese regulators are planning to target people and businesses that provide services related to centralized cryptocurrency trading.
Trading volumes are down
According to CryptoCompare.com, U.S. bitcoin trading accounted for 40% of the global total. This is because in key international markets, the trading volume has plunged. Generally, Japan is the most active cryptocurrency market, and South Korea is No. 3. On Tuesday morning, the combined volume from the two nations made up less than 30% of the total.
Cryptocurrencies are a speculative asset class, and they require lots of investor interest to help keep their prices high. If that interest has waned in key markets, it would certainly put downward pressure on their values.
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