What happened to bitcoin price?
The bitcoin price has tumbled since the beginning of the week. In the last 48 hours, the price of bitcoin has dropped over 15%, to a low of US$14,365.88. At time of writing bitcoin is recovering, trading at just over US$15,000 a coin.
Why the drop?
With no previous announcement, CoinMarketCap — a popular website covering crypto market data — decided to eliminate South Korean exchanges from its price-average calculations.
The website wiped out data from Bithump, Coinone and Korbit following a crackdown by the South Korean government on cryptos.
This action decreased the total crypto market value by over US$100 billion in just a day, sparking a crypto selloff.
You can see the drop in the chart below.
On 7 January, the total market cap for cryptos stood at around US$830 billion. Yet, by Monday, this had dropped to US$682 billion. It is now up at around US$741 billion.
The website confirmed the move later in a tweet, citing the reason for the change as ‘extreme divergence in prices from the rest of the world and limited arbitrage opportunity.’
What now for cryptocurrencies?
Expect more government clampdowns on cryptos.
It looks like China is now planning to crack down on bitcoin miners. As reported by Techcrunch in a leaked document, the country’s internet finance regulator has asked local governments for help in getting bitcoin miners to make an ‘orderly exit’ from China.
Back in September, China banned initial coin offerings — a way to raise funds for a cryptocurrency.
If you own cryptos, prepare for more volatility.
If you don’t own any, and are looking to get into the space, check out our in-house crypto expert Sam Volkering’s guide on buying bitcoin. You can get it here.
Analyst, For Markets & Money