Bitcoin slides as concerns linger

Bitcoin slumped, dragging down smaller rivals such as ether and litecoin, as concerns that regulators will tighten their grip on the market weigh on the world’s largest crypto-currency.

Regulators in China and South Korea are increasing oversight on crypto-currency trading and mining, while the US Securities and Exchange Commission late last year started cracking down on some digital token sales, known as ICOs.

Coinmarketcap.com’s decision to exclude Korean pricing data for coins helped create the appearance of a large drop in prices, which some traders attributed as playing a part in the sell-off.

“News on the regulatory front is dragging down cryptos,” said Gabor Gurbacs at VanEck Associates. “South Korea and China tightening is weighing on bitcoin and in the ICO market, things started slowing down, with the SEC cracking down on illegal offerings.”

Bitcoin slumped as much as 17% to $14 820 yesterday – the most in more than two weeks. The rout in bitcoin is part of a broader selloff in the crypto-currency realm, with all of the top ten by market cap falling, and most tumbling by at least 10%, according to Coinmarketcap.com.

Cardano fell 16%, while litecoin slumped as much as 16% to as low as $230.

Bitcoin is little changed this year after surging about 1 400% in 2017.

China plans to limit power use by some bitcoin miners, people familiar with the matter said last week, a potential challenge to an industry whose energy-intensive computer networks enable transactions in the crypto-currency.

South Korea began inspections at six banks, including Industrial Bank of Korea, that provide virtual accounts to companies related to crypto-currency trading, to clamp down on potential money laundering.

The nation last month said it will restrictively allow crypto-currency trading on only qualified exchanges and review a possible capital gains tax on crypto trading as a way to restrain the nation’s frenzied speculation.

Naeem Aslam at TF Global Markets said the increased regulatory oversight will weigh on prices in the short term, but should be positive in the longer term. – Bloomberg