The bitcoin sell-off continued Monday following a roller-coaster week of trading as authorities in China and the U.S. move to tighten regulation and tax compliance on cryptocurrencies.
Bitcoin fell roughly 16% to $31,772.43 by 12:27 p.m. ET, on Sunday according to Coin Metrics data.
As of 6.00 A.M East African Time, the digital currency was trading at $ 35,737.18, a 5.18% decline.
Ether, the second-largest cryptocurrency, has also been on a losing streak, declining 5.9% in the last 24hrs. As of press time, the digital currency was exchanging hands at $ 2, 193.17
Declining Support for Bitcoin
Bitcoin’s recent sell-off is a major reversal for the cryptocurrency, which appeared to be gaining traction among major Wall Street banks and publicly traded companies. However, recently bitcoin has been hit by a series of negative headlines from major influencers and regulators.
Tesla CEO Elon Musk, who helped fuel bullish sentiment when his company bought $1.5 billion of bitcoin, delivered a blow earlier this month when he announced that the automaker had suspended vehicle purchases using the cryptocurrency over environmental concerns.
Cryptocurrencies continued to slide as Chinese authorities called for tighter regulation on crypto mining and trading. The U.S. Treasury announced that it would require stricter crypto compliance with the IRS.
Cryptocurrency exchange Huobi said it’s scaled back or suspended some of its services and products in certain countries and has stopped its miner hosting services in mainland China in response to the recent crackdown on crypto in that country.
“Due to recent dynamic changes in the market, in order to protect the interests of investors, a portion of services such as futures contracts, ETP, or other leveraged investment products are temporarily not available to new users from a few specified countries and regions. Huobi always strives to abide by the evolving policies and regulations of each jurisdiction to adhere to the risk and preserve the well-being of our users and their assets, ” according to Huobi’s statement.
Huobi is also set to suspend the sale of crypto mining machines and mining hosting services in mainland China. The exchange said it will soon give its existing clients more details regarding what to do with their mining machines.
Huobi is a major crypto trading services provider for Chinese crypto investors. Huobi has the eighth largest mining pool globally, with a 4% hash rate of the entire bitcoin network.
A JPMorgan report showed large institutional investors were dumping bitcoin in favour of gold. The news raised questions about institutional support for the cryptocurrency.