Cryptocurrency markets have taken a huge hit after reports of China’s planned clampdowns on cryptocurrency exchanges. Bitcoin has dipped 14% to trade at $11,863, the lowest level in a month. Ethereum is now trading at $1,069, a dip of about 18% in just a few hours. Coins with small market capitalisations have been particularly hit hard with most slipping more than 20% in a matter of hours.
NEO Holds Strongest
NEO which has been experiencing a strong rally in the last few days was the last to go down to trade at $150, a drop of about 6.7% in value. The digital currency dubbed “the ethereum of China” has been going up by an average of 20% in the last few days. Qash which has also been climbing steeply has lost about 28% of its value.
The pattern is replicated across board in a gloomy day for the nascent market. South Korea which has one of the most intense cryptocurrency trading also announced it was working on a bill to ban cryptocurrencies although it later said it was conducting more consultations. The government raided two exchanges last week.
China Contributes to Cryptocurrency Sell Off
China is looking at measures ‘to block domestic access to home-grown and offshore platforms that enable centralized trading,’ Bloomberg reported citing sources within the government.
Reuters reported that the People’s Bank of China was planning a complete ban on centralised cryptocurrency trading citing the deputy governor Pan Gongsheng.
The measures will target cryptocurrency exchanges and other services in the industry. The move sent the markets reeling on Tuesday’s trading as traders scrambled to exit. Peer to peer exchanges will however not be affected.
Exchanges to be Banned
Pan called for the internet regulators to block access to local and international exchanges. The government is said to be worried about the massive capital flight from the country. Transfer services are also set to come under scrutiny for enabling the transactions.
Bitcoin mining which happens largely in China will also be gradually phased out, according to reports. The crackdown started in 2017 with the ban on initial coin offerings.