Cryptocurrencies continued their sharp tumble on Wednesday as bitcoin dropped by over 16% as continued fears of regulation from Russia and China dent investor confidence.
The price of the world’s biggest and best known cryptocurrency fell $2,000 to as low as $10,000, on the Luxembourg-based Bitstamp exchange, for the first time since November, and down from lows of $11,200 on Monday and $12,000 at 2pm GMT Tuesday.
Bitcoin led the fall on other cryptocurrencies, including Ethereum and Ripple, over suggestions that Russia and China may crack down on trading.
Chinese state media reported that the government planning to stamp out remaining cryptocurrency trading in the country following its crackdown last year, which saw Beijing shut down bitcoin exchanges and ban all initial coin offerings.
The Russian premier Vladimir Putin said on Tuesday that while the Russian Central Bank currently has sufficient powers, that “in broad terms, legislative regulation will be definitely required in future”.
Shuhei Fujise, chief analyst at Alt Design, said: “Cryptocurrencies could be capped in the current quarter ahead of G20 meeting in March, where policymakers could discuss tighter regulations.”
Makoto Sakuma, analyst at Tokyo-based NLI Research Institute, said trading volumes had been low despite the volatility. He said: “I would say the strong rally in bitcoin and other cryptocurrencies we saw last year is over. But while the rally phase is over, I don’t think it is right to say bitcoin is finished.”
According to data from CoinMarkCap, the third-largest cryptocurrency Ripple has dropped to $1.07, down 22.8% in the last 24 hours and down from a high of $3.80 on 4 Jan. Similarly, Ethereum, the second most popular cryptocurrency, was down 15.5% to $926 and down from $1,431 on 13 January.
Bitcoin was fluctuating at around $10,200 on Bitstamp at time of publication on Wednesday.
“Bitcoin is deciding whether this is the moment to crash and burn,” said Steven Englander, head of strategy at New York-based Rafiki Capital. “My conjecture is that cryptocurrency holders are trying to decide whether to abandon bitcoin because its limitations mean it will be superseded by better products or bet that it can thrive despite them.”