Bitcoin and its counterparts fell on Friday after the sale of speculative assets gained momentum and after Russia’s central bank proposed banning all cryptocurrency transactions in the country.
The price of bitcoin fell as much as 7.4% against the dollar during Asian trading on Friday to 38,261 dollars. Other major cryptocurrencies also fell, with ether falling by almost 9 percent.
The decline in some of the world’s largest cryptocurrencies has wiped out about $ 140 billion from their combined market capitalization, according to CoinMarketCap.
The collapse of cryptocurrencies comes after investors dumped stocks in technology companies, pushing the Nasdaq into correctional territory on Thursday because of expectations that the US Federal Reserve will take action to curb the loose pandemic monetary policy to fight inflation.
Bitcoin sales began to pick up at the end of a trading day in New York on Thursday after video streaming giant Netflix warned of subscriber growth. Shares of the company fell about 20% in Nasdaq’s pre-market trading on Friday.
Andrew Sullivan, managing director of Outset Global in Hong Kong, said Asia saw “huge volumes moving into a number of markets as investors move to money” on Friday as technology stocks in the region followed a downturn in Wall Street.
The sharp sell-off of digital assets also came a day after Russia’s central bank announced draft proposals aimed at banning all trade and mining of cryptocurrencies. The proposed provisions will also block cryptocurrency investments from banks and ban all cryptocurrency exchanges for traditional currencies in Russia, one of the world’s largest cryptocurrency mining centers.
The central bank said in a 36-page report that the rapidly growing value of cryptocurrencies “is largely determined by speculative demand for future growth, which creates bubbles”, adding that “they also have aspects of financial pyramids, as their prices rise to is largely supported by demand from new entrants. “
The announcement initially had little impact on bitcoin, which rose 3.7% against the dollar on Thursday. But by Friday afternoon in Asia, the cryptocurrency had fallen more than 10 percent from its previous high to its lowest level since August.
“Russian regulators are disappointed [with the cryptocurrency industry] for several years, and none of their warnings were heeded, ”said Vince Thurcott, Asia-Pacific Sales Director at Eventus Systems.
He added that while Russia’s proposal is “relatively harsher”, it is only the latest in a series of reports of cryptocurrencies from regulators around the world, focused mainly on protecting retail investors.
Thurcott likened the situation in Russia to that in China before Beijing launched a crackdown on industry. “No one was listening [Chinese officials] until they actually removed the hammer, “he said. Last year, China declared all cryptocurrencies illegal.
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