Bitcoin Market Cap Falls By $20 Billion - Major Crash Coming?

Bitcoin Market Cap Falls By $20 Billion - Major Crash Coming?

Later in the week, nearly every single cryptocurrency took a hit after reports of further regulatory clampdowns on cryptocurrency mining and exchanges from China and South Korea, both of which are a huge focus for Ripple.

Bitcoin dropped below $12,000 this morning, falling as low as $11,182 to a four-week low as the notoriously volatile digital currency shed almost $1,000 in just an hour.

Bitcoin's slide triggered a massive selloff across the broader cryptocurrency market, with biggest rival Ethereum down 23 per cent on the day, according to trade website Coinmarketcap, and the next-biggest, Ripple, plunging 33 per cent.

The drop comes amid reports that China and South Korea are preparing to escalate recent measures to discourage use of cryptocurrencies.

On Monday, a report from Bloomberg, citing unnamed sources, said Beijing plans to block domestic access to Chinese and offshore cryptocurrency platforms that allow centralized trading.

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South Korea's unease over cryptocurrency trading follows drastic moves taken by China, which shuttered cryptocurrency exchanges past year and is now trying to shut operations that produce bitcoin, a process known as mining. "In addition to developments in China, South Korean Finance Minister Kim Dong-yeon reiterated on Tuesday that the government is actively considering an outright ban on crypto trading." .

South Korea, on the other hand, recently raided major cryptocurrency exchanges in the country. Officials are now weighing halting trading on exchanges.

Speaking at a meeting between internet regulators and policymakers last week, People's Bank of China (PBOC) vice governor Pan Gongsheng recommended the government to keep putting pressure on digital currency markets.

Even as market participants were breathing easy, the cryptocurrency universe experienced a setback, with majority seeing a sharp pullback today.

However, small peer-to-peer payment systems are not being targeted. Now, the cryptocurrency market cap has hit $590 billion. Ethereum, Ripple and the Bitcoin Cash lost respectively 12.41%, 19.16% and 15.51% early Tuesday. The cryptocurrency's market capitalization now stands at around $198 billion, according to Reuters.