Beijing's Regulations Wipe US$1 Trillion Off Crypto

Bitcoin and ether tumbled on Wednesday to three-and-a-half-month lows, on track to post their largest one-day loss since March last year, in the wake of China's move a day ago to ban financial and payment institutions from providing cryptocurrency services.

At one point during the meltdown, nearly US$1 trillion was wiped off the cryptocurrency's market capitalization.

In late morning trading, the market cap was at US$1.65 trillion, according to data tracker CoinGecko.com

Bitcoin, the biggest and best-known cryptocurrency, had already been under pressure from a series of tweets from Tesla boss Elon Musk, but the news from China sent it further down, to US$30,066.

The cryptocurrency has dropped 54 percent from a record high of US$64,895 hit on April 14. It is also heading for its first monthly decline since November 2018.

"Bitcoin's sharp price drop should come as no shock to the market," said Gavin Smith, chief executive officer of crypto consortium Panxora.

"Any asset which has risen as much as Bitcoin over the past year can be expected to have pullbacks as some investors withdraw profits, like we're currently seeing. While often a brilliant investment opportunity, traders must remember that Bitcoin is still an emerging asset class and will continue to experience large price swings," he added.

Bitcoin's decline whacked other crypto assets, with Ether , the coin linked to the ethereum blockchain network, dropping to US$1,850, its weakest level since late Janury. It was last down 26 percent at US$2,497. Since hitting a record high on May 12, ether has plummeted 57 percent.

Meme-based dogecoin also tumbled - losing nearly 26percent to US$0.35, according to Coingecko.

Shares in the crypto exchange Coinbase dropped 7.4 percent on Wednesday. Coinbase's share price has nearly halved from the peak hit on the day of its direct listing in April. (Reuters)