By
Updated on
- China said to look to limit power use by some bitcoin miners
- South Korea warned of restricting trading on some exchanges
Bitcoin slumped as much as 17 percent, helping to drag down smaller rivals such as ripple and litecoin, as the world’s largest cryptocurrency continues to be whipsawed by concerns about regulation and demand from Asia.
“The fuss about regulators tightening screws in South Korea is pushing the price of bitcoin,” said Naeem Aslam, chief market analyst at TF Global Markets in London. “This and the Chinese news is going to bring a blip in the price.”
The rout in bitcoin is part of a broader selloff in the cryptocurrency realm, with nine of the top 10 by market cap falling at least 10 percent, according to Coinmarketcap.com. Ripple tumbled as much as 31 percent to as low as $1.90, while litecoin slumped as much as 16 percent to as low as $230. Bitcoin is little changed this year after surging about 1,400 percent in 2017.
China plans to limit power use by some bitcoin miners, people familiar with the matter said last week, a potential challenge to an industry whose energy-intensive computer networks enable transactions in the cryptocurrency.
The People’s Bank of China outlined the plan Jan. 3 at a closed-door meeting, according to the people, who asked not to be identified because it wasn’t public. They didn’t detail how authorities plan to enact the curbs.
South Korea said last month that it will restrictively allow cryptocurrency trading on only qualified exchanges and review a possible capital gains tax on crypto trading as a way to restrain the nation’s frenzied speculation.
For more on cryptocurrencies, check out the Decrypted podcast:
“We need regulators to look into the space more closely, the Korean exchanges have become crazy in terms of price differences so these regulatory actions would help the price stability,” Aslam said. “As for the mining operations, China is making the process more difficult for miners, but opportunist have started to focus on Canada which is more regulatory friendly and cheap on the energy front."
— With assistance by Steven Yang
