Bitcoin sinks on crackdown fears

London/New York : Bitcoin slid as much as 18 per cent yesterday to a four-week low, as worries about a regulatory crackdown on the market spread after reports suggested it was still possible that South Korea could ban trading in cryptocurrencies.

Bitcoin’s slide triggered a selloff across the broader cryptocurrency market, with biggest rival Ethereum down 23pc on the day at one point, according to trade website Coinmarketcap, and the next biggest, Ripple, plunging by as much as a third.

Bitcoin traded as low as $11,191.59 on the Luxembourg-based Bitstamp exchange. In New York trading, it edged up to $12,078, but that was still down 11.2pc, leaving it on track for its biggest one-day fall since September.

“With reports on a renewed crackdown on the cryptocurrency in China fuelling anxiety over future restrictions, further losses could be on the cards (for bitcoin) in the near term,” said Lukman Otunuga, research analyst at FXTM in the UK.

“The sharp depreciation witnessed in bitcoin today should remind investors on how explosively volatile and unpredictable the cryptocurrency can be,” he added.

South Korean news website Yonhap reported that Finance Minister Kim Dong-yeon had told a local radio station that the government would be coming up with a set of measures to clamp down on the “irrational” cryptocurrency investment craze.

South Korea said on Monday its plans to ban virtual coin exchanges had not yet been finalised, as government agencies were still in talks to decide how to regulate the market.

That came amid news that a senior Chinese central banker had said authorities should ban centralised trading of virtual currencies and prohibit individuals and businesses from providing related services.

A director at Germany’s central bank said on Monday that any attempt to regulate cryptocurrencies must be on a global scale as national or regional rules would be hard to enforce on a virtual, borderless community.

The latest plunge in the market came as wealth management firm deVere Group, which has $12 billion under advisement, said it was launching a cryptocurrency app.