The entire cryptocurrency market is going through a devastating correction today, on January 16, for the first time within the past few weeks. Each of the first ten virtual coins, listed on Coinmarketcap.com, on average lost over 20% in the last 24 hours. To take a handful of examples: Bitcoin and NEO plunged by around 14-16%, Ethereum, Bitcoin Cash, and Litecoin lost about 20%, whereas Ripple’s and Stellar’s low reached the margin of 30%. It is remarkable that bitcoin, in particular, reached the 2018 low of $1,000.
But if we look at the top-100 cryptocurrencies, the data will be even more shocking, as none of the coins was showing positive trends of recover at the moment of writing. From time to time, penny-currencies could demonstrate 1-2% doubtful growth like Thether, but that didn’t last long. The majority of coins showed the decline by 20-40%, while Dent, Binance Coin, and Dentacoin hit the low of 50% drop.
There’s no specific reason why the market is dropping like this. However, there is a possibility that the correction could have been triggered by several countries’ crackdown on cryptos, including China and France.
Last week the crypto turmoil was fueled by South Korean plans to potentially ban the crypto exchanges, which later were softened by the government. This week, China is getting on the stage.
On Monday, January 15, Bloomberg, citing own sources, informed that China’s government was considering measures for banning inner access both domestic and offshore platforms that allow centralized trading. Even though such a restriction will not affect tiny p2p bitcoin or its ilks transactions, wallet providers, entrepreneurs, and firms, which enable centralized trading, will face the forbiddance.
Reuters, in its turn, cites Pan Gongsheng, the PBOC Vice Governor, who says that China will keep suppressing bitcoin and its brethren trading. According to Pan, the government should additionally close not mere exchanges but also websites and mobile applications regardless of their origin. Moreover, the official believes, sanctions should be imposed on those who offer cyber payment services.
“Pseudo-financial innovations that have no relationship with the real economy should not be supported,” said Pan.
Notably, just last year the country banned ICOs, closed up local cyber money exchanges, but this didn’t help much as people started finding different ways around.
According to Forbes, China also plans to limit electrical supply for miners. However, the magazine’s contributor Sara Hsu suggested that the electricity is not the concern but the lack of China’s control over money laundering and other malicious actions connected with crypto mining.
France Stepping In
Asia is not the only region which is concerned over bitcoin. Today the French finance minister Bruno Le Maire has urged for strict regulations on cyber money so that nobody would use them for criminal purposes a tax evasion and supply of terrorism. He also notified about his order to draft potential novel rules and emphasized that cryptos jeopardize people because of speculation and manipulation over them.
Le Maire also announced his decision to set up a working group to work on the regulation rules. As the head of the group Jean-Pierre Landau, the country’s ex-deputy governor of the central bank was appointed. Notably, Landau compares bitcoin craze to tulip fever in the 1600s. So we can see how France steps into the regulatory race.
Nevertheless, as CCN states, there is no guarantee that particularly this regulatory pressure fueled the fall on the crypto market. Instead, it could have been triggered by the sharp rise in the market valuation of most digital coins within the limited time. It is not the first time when the market experiences such decline, so there is hope that it will come back to norm within a few days.
Table Source: coinmarketcap.com