If there is any reason for you to panic, this would be the perfect time, especially if you are looking for short term profits. Just last December 2017, Bitcoin was soaring near $19,000. In fact, a Bitcoin was selling for $20,000 in some exchanges during that time, However, things are different this time around. In fact, on Monday, February 5, Bitcoin has dropped for the first time since mid-November 2017, to below $7,000.
BTC reached as low as $6,661.51 on Monday losing 11% of its value within 24 hours. And to give you a perspective, it has lost around 60% of its value over the last 30 days.
And what about the other digital currencies? The sharp drop in Bitcoin’s value was mimicked by the prices of altcoins. Top 50 digital coins today were all losing up to 31% in value in just the last 24 hours. Ethereum has dropped by around 11% while Bitcoin Cash dropped by 17% and NEO dropped by 16%.
What Caused the Nose Dive?
So what exactly caused the continuous drop in the value of Bitcoin? To no surprise, it has been caused still by the regulations against cryptocurrency activity in Asia. People’s Bank of China recently banned all foreign cryptocurrency exchanges operating in China. It isn’t the first time that regulators have been taking a closer look at the different exchanges. In September, China already banned local cryptocurrency exchanges in the country. For the next months, it has continued to track down crypto related activities such as mining.
And this move has been mirrored by other countries as well. South Korea, though never announced to stop crypto trading, has been taking a closer look at its rules as well.
China Will “Step Up” Measures Against Cryptocurrencies
In a report to the South China Morning Post, China’s government-run publication, it has announced that China will “step up” measures to remove offshore platforms for virtual trading and ICOs. This only means that Chinese nationals will no longer have the option to invest on overseas exchanges or even participate in ICOs abroad.
After China’s crackdown in earlier months, many domestic investors have used virtual private networks (VPNs) in order to bypass the government controlled internet and to be able to connect to exchanges in neighboring territories including Japan, South Korea, and Hong Kong.
These three locations that have been mentioned have all emerged as one of the top trading exchanges in the world in terms of trading volume. It was reported that it’s adding 200,000 users every hour. Though the exact number of Chinese citizens trading cryptocurrencies is unavailable, the recent announcement by the Chinese government indicates that there is a problem. According to the publication, “many people turned to overseas platforms to continue participating in virtual currency transactions”. Also, it mentioned that “risks are still there, fueled by illegal issuance and even fraud and pyramid selling”.
Could we be seeing Bitcoin to continuously drop given the circumstances that regulators are taking stricter action against crypto activity? It has already been a rough few weeks for 2018 and it seems that it isn’t even over yet for cryptocurrencies