Cryptocurrency prices dropped Friday, extending the week’s selloff, after new comments from Chinese officials spurred fears of a regulatory clampdown.
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
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
a strategist at cryptocurrency exchange LMAX Digital.
—Brian Spegele contributed to this article.
Write to Caitlin Ostroff at [email protected]
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