China’s government dealt the cryptocurrency markets a severe blow on Tuesday, as multiple outlets reported that the central bank officials plan to block residents from accessing foreign cryptocurrency trading exchanges. The news took the wind out of the market’s sails, and led by the bitcoin price, every top 100-cryptocurrency lost value against the US dollar.
People’s Bank of China (PBoC) officials had already banned domestic order-book exchanges, but mainland residents were often still able to access some foreign exchanges, as well as over-the-counter (OTC) trading platforms. With this move, though, the PBoC seeks to further isolate China’s 1.4 billion residents from the global cryptocurrency ecosystem.
Unsurprisingly, the cryptocurrency market cap careened downward by more than $150 billion, although it has since experienced a slight recovery to $574 billion. Even at this level, though, the cryptocurrency market cap is down 18 percent for the day.
The bitcoin price set the tone for the day, and it was not a pleasant one. The most prominent cryptocurrency declined by more than 14 percent to a present value of $11,750 on Bitfinex. Amazingly, this correction forced bitcoin’s market cap below $200 billion for the first time in nearly a month, and its circulating supply is currently valued at $199.6 billion.
Although the move is concerning, this is not the first time that the PBoC has injected turbulence into the markets through hostile regulatory policies. In each of the previous cases, the bitcoin price was quick to consolidate and return to a position of strength, so there is no reason to believe the markets will fail to rebound from this report, too.
No major cryptocurrency was immune from the correction, and the Ethereum price was among those hardest hit. The second largest cryptocurrency posted a 22 percent decline, and the Ethereum price dove as low as $966 before inching its way back to $1,072. At present, Ethereum has a $101.3 billion market cap.
Ethereum’s poor performance was matched by the wider cryptocurrency markets, and altcoin market caps declined by a combined $102 billion for the day.
Ripple price plunged by 25 percent to $1.36, reducing its market cap to $52.1 billion. The bitcoin cash price declined by 19 percent, which knocked it below the $2,000 mark to a present value of $1,965.
Fifth-ranked Cardano lost 22 percent, and the litecoin price managed to hold above $200 despite a 16 percent pullback. NEM declined by 13 percent, while NEO’s four percent decline constituted the best performance among top 10-cryptocurrencies.
The stellar price declined by 23 percent to $0.48, and IOTA’s 18 percent decline dropped its price to $2.98 to round out the top 10.
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Last modified: May 20, 2020 9:10 PM UTC