Bitcoin futures drop 20% since bitcoin falls into six-week low over crackdown fears

Nishanth Shetty

Nishanth Shetty

January 17, 2018 6:28 am

Bitcoin futures drop 20% since bitcoin falls into six-week low over crackdown fears | Coindelite News
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Bitcoin futures drop 20% since bitcoin falls into six-week low over crackdown fears

Bitcoin is having a six-week low after comments from South Korea’s finance minister restored worries about a crackdown in one of the largest markets for digital currency trading.

The Cboe and CME bitcoin futures contracts departing later this month both dropped, with the Cboe contract falling 20 percent to around $11,010 and the CME contract off nearly 20 percent around $11,160 as of 4:01 p.m., ET. Trading in the Cboe bitcoin futures contract was briefly paused in according to the price volatility rules.

Before this week, South Korea was reportedly moving to check dangerous cryptocurrency trading with a potential bill to ban cryptocurrency trading.

Bitcoin dropped more than 19 percent to a low of $10,969.15 on Tuesday, its lowest since early December, according to Coin Delite’s Price Chart.

Other major Cryptocurrencies such as Ethereum and ripple also fell significantly. According to Coin Delite’s Price Chart.

Ethereum dropped 22 percent to $1,007.

while ripple also fell 30 percent to $1.17.

Investors also observed reports of an escalated crackdown on the cryptocurrency market in China.

China was planning to ban domestic access to Chinese and offshore cryptocurrency platforms that allow centralized trading. Regulators will also target people and companies that provide market-making, settlement and clearing services for centralized trading.

The fall is not fully unexpected

Iqbal Gandham, U.K. managing director at eToro, told:

“The market is correcting off the back of news that China is moving to crack down on cryptocurrency trading. Chinese investors are likely spooked having heard the news and the market are on edge as a result. But we don’t expect to see a major sell-off. Bitcoin, in particular, has gone through this cycle before Moreover, you look at the last three years, January is typically the low point for cryptocurrencies. So this dip is not wholly unexpected.”

The digital currency reached to a record high of $19,343 last month but has since been on a gradual decline. Futures contracts for bitcoin were introduced for the first time last month, with huge derivatives operators CME and the Cboe.

Mati Greenspan, a senior market analyst at eToro, said:

“The pullback seems to be coming from a lack of buyers in Asia, Japan, and South Korea usually dominate this market but over the last few days, the volumes have been dropping steadily. This morning the combined volumes from these two countries dropped below 30 percent. The Koreans and Japanese are used to paying a premium of 20 percent or more per coin. It seems they’re getting wise and waiting for the market to even out before buying it again.”

Charles Hayter, CEO of Crypto Compare, told investors are taking the profit since they are ready to face the challenge going forward.

Hayter stated:

“It seems like it is uncertainty spooking the markets to a degree with regulations unclear. Korea and Asia in general has been a strong support for the cryptocurrency markets adding users and demand with prices often trading at a premium.”

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