While the largest digital coin was down 25 per cent at US$10,338 as of 4.37 pm in NY, it was still at the lowest level since late December, according to composite pricing on Bloomberg.
The number of people who use Coinpan, an online community where users can share information about bitcoin, soared 60 percent on-week to 140,000 during the cited period, the findings showed.
Other cryptocurrencies including Ethereum and Ripple suffered much heavier drops, losing over a fifth of their value. "In addition to developments in China, South Korean Finance Minister Kim Dong-yeon reiterated on Tuesday that the government is actively considering an outright ban on crypto trading." . However, he believes that such drastic measures require "serious" discussion between ministries.
The impact of government decisions regarding the cryptocurrency market is heightened by software updates created to solve scalability problems, with developers relying massively on finding the right approach to the technical development of the blockchain. "The news is hitting prices and broader sentiment, and it follows China's move to shutter mines".
Last week, South Korean Justice Minister Park Sang-ki said his ministry was preparing a bill that, if passed, could ban trading via cryptocurrency exchanges. "It looks like the light touch that has allowed the crypto-boom to explode may be coming to an end", he wrote in a note to investors.
Bitcoin is now trading at around $11,000, which is a major blow to the value of the "people's currency". It is normal to see such a drop when a major country drops trading volumes with 30%, but investors should realize the value of digital currencies and their future use.
Steven Maijoor, chairman of the European Securities and Markets Authority, said investors "should be prepared to lose all their money" in Bitcoin, in a Bloomberg TV interview in Hong Kong.
What one can say for sure is that bitcoin remains extremely volatile. China has already banned cryptocurrency exchanges, and South Korea - the world's largest cryptocurrency market right now - is trying to assess how to deal with the blockchain currency and whether it should be banned.
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