The threat of a regulatory crackdown on cryptocurrencies sent the price of Bitcoins plunging by as much as 20% yesterday, extending a pattern of downside volatility that started a earlier this week. The two charts below tell the story. Robeco’s Jeroen Blokland tweeted a chart showing the total market capitalization of cryptocurrencies down by 33% over a 2-day period – a not insignificant loss of US$268 billion. That puts Bitcoin’s one-day loss of 20% in perspective (see the chart by Bloomberg below).
The selloff followed South Korea’s announcement that it might ban cryptocurrency exchanges and news that China might extend its crackdown on digital currencies.