China's ban, inflation concerns trip cypto market; dogecoin, bitcoin drop over 10%
The widespread sell-off in the crypto market wiped out over $265 billion dollars in market capitalisation.
May 19, 2021 / 03:37 PM IST
Bitcoin (Representative Image)
The cryptocurrency market is reeling under pressure on May 19 amid uncertainties over inflation and China's crackdown on crypto trading.
The widespread sell-off in the crypto market wiped out over $265 billion dollars in market capitalisation. At the time of writing this article, the value of the whole cryptocurrency market stood at around $1.86 trillion, down 12.47 percent from the previous day.
All major token are trading with deep cuts. Bitcoin prices are down over 10 percent, ethereum (15 percent), binance coin (16 percent), dogecoin (14 percent), XRP (6 percent), according to data from Coinmarketcap.com.
China has banned financial institutions and payment companies from providing services related to cryptocurrency transactions and warned investors against speculative crypto trading.
Under the ban, such institutions, including banks and online payments channels, must not offer clients any service involving cryptocurrencies, such as registration, trading, clearing and settlement, three industry bodies said in a joint statement on Tuesday.
"Recently, cryptocurrency prices have skyrocketed and plummeted, and speculative trading of cryptocurrency has rebounded, seriously infringing on the safety of people's property and disrupting the normal economic and financial order," they said in the statement.
Uncertainties over inflation also prompted investors to reduce exposure to riskier assets.
The latest survey
by BofA Securities showed that 35 percent of respondents see inflation as the biggest tail risk to their portfolios. About 69 percent of those surveyed expect high growth and high inflation going forward.
This is despite the US Federal Reserve playing down the recent surge in prices as temporary in nature.