Both the ethereum price and bitcoin price fell to monthly lows on Wednesday, headlining a market slump that has now reached $30 billion.
Rumors and speculation that the People’s Bank of China (PBoC) is preparing to outlaw bitcoin exchanges grew more serious on Wednesday, as a self-regulatory agency established by the bank issued a statement warning their members not to operate cryptocurrency exchanges or utilize their trading platforms.
The National Internet Finance Association of China (NIFA) claimed that bitcoin exchanges do not have a “legal basis” in the country and derided them as a tool for money launderers and other criminals. From a rough translation of the statement:
China Internet Finance Association calls on: Member units should fulfill their commitment to industry self-regulatory conventions, strictly abide by national laws and regulations, do not participate in any of the so-called “virtual currency” related to the concentration of transactions or services for such transactions, take the initiative to resist any illegal Illegal financial activities.
NIFA released a similar statement criticizing initial coin offerings (ICOs) shortly before the PBoC banned Chinese citizens and residents from creating or participating in token sales, so this quasi-official warning added to the growing list of rumors and hearsay that suggest a bitcoin exchange ban is imminent.
Every new addition to the rumor mill has caused the markets to contract, and they never quite recover before a new report sends them careening downwards again. On Wednesday, this downwards movement dropped the bitcoin price below $3,800 for the first time since August 22. This represents a 7-day decline of more than $700; for reference, the bitcoin price was $610 this time last year.
The ethereum price has fared equally as poorly. A week ago, it was trading at $330–having already declined $60 on the heels of China’s ICO ban. Since then, it has dropped well below the $300 threshold. Wednesday afternoon, it fell as far as $261; this put the ethereum price at its lowest point since August 7.
The retreat extended throughout the altcoin markets. Monero is the only top 10 cryptocurrency that has not posted a double-digit decline during the past 7 days, but it’s 9.3% slide is far from impressive.
This comprehensive pullback has reduced the total cryptocurrency market cap to $131.1 billion. Altogether, the total value of all cryptocurrencies has fallen 21%–constituting more than $30 billion–since Friday, when it reached its weekly peak of $165.3 billion.
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Last modified: May 21, 2020 9:14 AM UTC