Bitcoin, ether and other cryptocurrencies plummeted in value during the early hours of East Asia’s trading day. The market downturn was spurred by reports that South Korea is preparing to ban all cryptocurrency trading.
Cryptocurrencies plunged as the business day began in Hong Kong on Friday. Bitcoin (BTC) and ether (ETH) both dropped more than 5% as customers fled crypto bank Silvergate, whose stock tumbled 58% during U.S. trading Thursday. Most of the other 10 largest cryptocurrencies by market cap saw declines similar to BTC and ETH’s. This could be the beginning of a long-term trend, as investors grow increasingly wary of the security of digital assets.
“Silvergate Bank’s recent issues are causing a lot of unease among other financial institutions,” Nick Ruck of ContentFi, a Web3 venture studio, said in a recent note to CoinDesk. “The release of some of Mt. Gox’s bitcoin has also added to the volatility.”
Coinbase was not the only major crypto exchange to experience connectivity issues today. Binance, Bitfinex, Kucoin, OKX and Kraken all reported similar problems. The sell-off was so rapid that it took a toll on Coinbase, causing it to experience connectivity issues at 10:20 a.m. Hong Kong time.
Bitcoin’s price falls to an intraday low of $22,020 as Asia trading hours begin, after remaining roughly steady at $23,500 for most of the past day. It appears to rebound slightly, recovering to just under $22,400 following its plunge.
Ether is experiencing a similar pattern, falling to $1,550 after spending the past day hovering around $1,650 with limited change.
Bitcoin’s market cap declined by over $20 billion to $431.9 billion, according to CoinMarketCap. This signals a $1.07 trillion market cap for all cryptocurrencies. Open interest in bitcoin futures was down 8.8% in the last four hours, according to Coinglass. This signals a waning interest in the cryptocurrency. Open interest for ether was down 5%.