Significant declines in prices for Bitcoin and Ethereum following the potential crackdown on exchange platforms by Chinese government have shaved $40 billion off cryptocurrency market cap over the past couple of weeks.
On Thursday, Bitcoin price tumbled another 8%, falling to $3,380.60. The world’s most popular cryptocurrency by market cap has seen a decline in price on nine out of last thirteen days. Bitcoin trades differently from other assets. Unlike stocks and bonds, cryptocurrency markets don’t close at set time.
Bitcoin is down nearly 30% as compared to the All-Time High above $5,000 on September 1st. This is a second drop of such magnitude over the past three months. Between June and July, the prices fell 33% affected by the uncertainty around Bitcoin software upgrade and blockchain split.
Bitcoin is still up about 250% since the beginning of this year with a market cap of $56 billion.
The most recent sell-off was fueled by Chinese government banning ICO and calling it an illegal funding method. It has dealt a blow to all cryptocurrencies.
Things accelerated when JPMorgan CEO Jamie Dimon called digital currency a fraud “worse than the tulip bulbs” and told everyone that he thinks it won’t end well.
Meanwhile, it became known that China-based exchange BTCC will end of all of its operations on September 30th. Such decision was caused by the rumors that Chinese authorities are getting ready to ban cryptocurrency exchanges.
Prices of Ether, the second most popular cryptocurrency that trades on the Ethereum platform, plunged 13% to $234.88 and is down 40% from its last peak at $393 on September 1st. Ether’s market cap is currently at $22.2 billion. However, the digital currency is still up 3,000% since the end of 2016.
Acceptance of cryptocurrency currently varies from country to country. While plenty of developed counties in the West and Asia allow digital currencies to be used as a payment method, some emerging countries see them as a threat and ban the exchanges.
For example, Namibia’s Central Bank issued a paper outlining its distrust in cryptocurrency. National laws do not permit the merchants to accept digital currencies as a payment method for goods and services. Cryptocurrency exchanges are also banned in the country.
Some experts believe that worldwide acceptance of Bitcoin isn’t as certain as Bitcoin investors like to think.