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Cryptocurrency Price Check: Bitcoin Slide Drags Down Sector

Bitcoin falls, pulling down the sector, as calls for regulation grow louder.
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Cryptocurrency prices fell Monday as Bitcoin, the world's largest cryptocurrency, led other stocks into the red.

At last check Bitcoin was down 2.9% to $30,768, according to CoinDesk. Ethereum dropped 4.4% to $1,825, while Dogecoin was down 5.4% to 17 cents.

On-chain analysis Twitter account CryptoQuant found recently that Bitcoin net outflow transactions surpassed 60,000 for the first time in a year and deposits to exchange wallets fell below 20,000. 

On Friday, Binance said that it had stopped selling digital tokens linked to shares, as Hong Kong's financial watchdog became the latest in a string of regulators to crack down on the cryptocurrency exchange platform's "stock tokens" offerings.

The Wall Street Journal reported Monday that accountants and lawmakers are urging standards setters to fill a void and write concrete rules telling companies how to account for Bitcoin and other cryptocurrency assets

"While Chinese crypto miners and exchanges are desperately relocating, international exchanges like Binance are discovering that failure to anticipate regulatory oversight could be fatal to their long-term survival," said David Lesperance, managing partner of Lesperance & Associates. "We can look at a similar situation from the mid 2000s … the on-line gaming industry."

Authorities in Malaysia destroyed Bitcoin mining equipment valued at more than $1.2 million after seizing them for operating illegally.

Miners allegedly siphoned off nearly $2 million of electricity to fuel the energy-intensive bitcoin-mining rigs. Authorities seized and destroyed 1,069 bitcoin-mining rigs by crushing them with a steamroller.

Winston Ma, former managing director and head of North America at China Investment Corp., China’s sovereign wealth fund, said that last week the China central bank issued a white paper on China’s digital currency development.

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"The [People's Bank of China] cited rapid growth in cryptocurrencies, especially global stablecoins, as a driver for research and development of e-CNY," he said, referring to the Chinese digital currency. 

Ma, who is author of "The Digital War– How China’s Tech Power Shapes the Future of AI, Blockchain and Cyberspace," added that this is the first time that China’s central bank, in an official document, links its sovereign digital currency issuance with stablecoins’ potential risks and challenges to the international monetary system.

The white paper pointed to "cryptocurrencies' lack of intrinsic value, acute price fluctuations, low trading efficiencies and huge energy consumption make them unfit for use in daily economic activities."

Ma noted that this was the same day that U.S. Treasury Secretary Janet Yellen said she would meet with the President’s Working Group on Financial Markets to discuss regulation of stablecoins.

The meeting was scheduled for Monday.

Tim Thomas crypto expert and swing trader, noted that last week, one of Ethereum's co-founders, Anthony Di Iorio, said he was moving on from the crypto space. 

He cited his own safety concerns as the reason for quitting and adding that the sale of one of his investments, Jaxx, will be in exchange for fiat currency rather than crypto

"Investors will have noted that prices brushed off this apparently negative news suggesting there is support at these price levels," Thomas said. "If prices continue to hold, the smaller cryptocurrency price ranges seen recently could offer a lower risk buying opportunity."

Still, he added, "the cryptocurrencies should be treated cautiously and investors will be advised to do their own research before putting their money at risk."