Bitcoin, other cryptocurrencies tumble on government crackdown worries

Bitcoin slid as much as 18 percent on Tuesday to a four-week low, as worries about a regulatory crackdown on the market spread after reports suggested it was still possible that South Korea could ban trading in cryptocurrencies.

Bitcoin's slide triggered a selloff across the broader cryptocurrency market, with biggest rival Ethereum down 23 percent on the day at one point, according to trade website Coinmarketcap, and the next biggest, Ripple, plunging by as much as a third.

Bitcoin traded as low as $11,191.59 (£8,127) on the Luxembourg-based Bitstamp exchange. In New York trading, it edged up to $12,078, but that was still down 11.2 percent, leaving it on track for its biggest one-day fall since September.

"With reports on a renewed crackdown on the cryptocurrency in China fuelling anxiety over future restrictions, further losses could be on the cards (for bitcoin) in the near term," said Lukman Otunuga, research analyst at FXTM in the UK.

"The sharp depreciation witnessed in bitcoin today should remind investors on how explosively volatile and unpredictable the cryptocurrency can be," he added.
South Korean news website Yonhap reported that Finance Minister Kim Dong-yeon had told a local radio station that the government would be coming up with a set of measures to clamp down on the "irrational" cryptocurrency investment craze.

South Korea said on Monday its plans to ban virtual coin exchanges had not yet been finalised, as government agencies were still in talks to decide how to regulate the market.