Bitcoin and rivals Ethereum and Ripple have suffered their biggest declines in six months, wiping billions off the cryptocurrency market.
After surpassing the $13,000 (£10,100) mark in June, bitcoin quickly ran out of steam and entered a state of decline, according to data on ranking site CoinMarketCap.
Prices briefly rose at the end of October, leaping from $7,500 (£5,830) to $9,900 (£7,700) in a matter of hours, but then began falling once again.
In the past week, bitcoin has sunk from a high of $8,680 (£6,750) to around $7,130 (£5,550) as of midday on Friday.
Bitcoin’s rivals have also suffered big declines in recent days. Ethereum sank from a high of $187 (£145) on Sunday to today’s price of $146 (£113) per coin, while banking-focused coin Ripple has slipped to $0.23 (£0.18) from Sunday’s high of $0.27 (£0.21).
A total of around $170bn (£132bn) has been wiped from the market since June, following mass sell-offs across the three digital currencies, reports Forbes.
What’s behind the declines?
A fresh crackdown on illegal cryptocurrency exchanges in China may have triggered this week’s price drops.
Earlier this month, Chinese state-run newspaper Xinhua ran a front-page article hailing bitcoin as a success, after President Xi Jinping described plans to launch China’s own digital currency as an “important breakthrough”, The Independent reports.
The superpower has taken a hard line towards cryptocurrencies and banned bitcoin in September 2017.
But Beijing’s change of tone “seemed to fuel an increase in trading activity on illicit platforms”, resulting in “a fresh crackdown on illegal exchanges”, says the news site.
The People’s Bank of China (PBOC) has warned that it will take decisive action against any illegal activity around virtual currency trading, while cautioning investors not to confuse bitcoin with blockchain – the technology that underpins cryptocurrencies.
Jamie Farquhar, a portfolio manager at London-based crypto investment firm NKB Group, told Reuters that the PBOC’s crackdown on illicit digital currency trading suggests that China’s acceptance of the technology is unlikely to include bitcoin.
“It’s the realisation that the positivity over Xi’s blockchain announcement was exaggerated,” he told the news site. “It may not include bitcoin at this point.”