The value of bitcoin has fallen by as much as 25% overnight as news of crackdowns by governments in a number of countries spread.
Bitcoin fell to US$10,388 at 4.37pm in New York yesterday (8.37am Wednesday in Melbourne), its lowest level since early December 2016.
Bloomberg reported that other cryptocurrencies like ripple (40%) and ethereum (26%) also experienced sharp falls.'
South Korea is one of the countries cracking down on cryptocurrencies and it is the third biggest market for such currencies.
On Monday, the Seoul Government issued its strongest warning to date about using bitcoin for trade, saying: “Cryptocurrency is not a legally recognised currency."
Neil Wilson, a London-based senior market analyst for online trader ETX Capital, told the news service: "The (South Korean) finance minister made it clear they’re definitely considering banning crypto trading - and it’s probably the third-largest market.
“The news is hitting prices and broader sentiment, and it follows China’s move to shutter mines.”
China moved against cryptocurrencies last year and has stepped up its offensive, particularly against online trading platforms and mobile apps, Bloomberg claimed.
“We’ve heard reports that South Korea, China and Japan have considered a shared approach, a path, to regulation,” Wilson said, also citing a challenge to digital coins from a bill in the US Senate.
“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.
The news agency quoted Steven Maijoor, the chairman of the European Securities and Market Authority as saying that investors should be ready to lose all that they had invested in bitcoin.
“It has an extremely volatile value, which undermines its use as a currency,” he said. “It’s also not broadly accepted.”