Bitcoin, Ether Prices Continue Falling After China Spurs Regulatory Fears

An electronic board of a cryptocurrency exchange in Seoul on March 15.



Photo:

yonhap/EPA/Shutterstock

Cryptocurrency prices dropped Friday, extending the week’s selloff, after new comments from Chinese officials spurred fears of a regulatory clampdown.

Bitcoin

fell 4.7% to $38,202.16 and ether declined 8% to $2,541.71 after Chinese authorities said Friday that tighter regulation was needed to protect the financial system, including taking action against bitcoin mining and trading. Before the comments, bitcoin had been trading near $41,000.

The Biden administration’s tax enforcement plan released Thursday also called for businesses receiving more than $10,000 in cryptocurrency to be required to report those transactions.

Cryptocurrencies are facing a reckoning after a phenomenal run since the end of last year that pushed bitcoin, ether and even joke crypto dogecoin to records. The run, partly driven by heightened interest from institutional investors, has stalled in recent weeks. Bitcoin has seen its sharpest declines after

Tesla Inc.

suspended accepting bitcoin for transactions, citing concerns last week over its carbon footprint.

Bitcoin has fallen about 22% this week, with the worth of all bitcoin now valued at about $750 billion, down from more than $1 trillion before Tesla’s policy reversal. Ether is down 36% for the week.

“The market is certainly more nervous about regulatory headwinds. Now that crypto has really stepped into the spotlight in 2021, inviting institutional adoption, it is also going to attract more intense scrutiny from the regulatory side,” said

Joel Kruger,

a strategist at cryptocurrency exchange LMAX Digital.

China’s recent warning on cryptocurrency sent the market in a tailspin. WSJ’s Aaron Back explains why the recent shake-ups in the value of bitcoin, dogecoin, ether and other cryptocurrencies may point to obstacles in mainstream acceptance. Photo: Dado Ruvic/Reuters

Bitcoin, Dogecoin, Ethereum: The Ups and Downs in Crypto Markets

Write to Caitlin Ostroff at [email protected]

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