The price of bitcoin went below 9,700 US dollars per coin yesterday. This drop of the price of the most popular cryptocurrency in the world is the result of the news that India would introduce strict regulations against the use of the cryptocurrency for illegitimate and illegal business operations and projects.
Arun Jaitley, the Minister of Finance of India criticized the cryptocurrencies in his speech to the Indian parliament. The minister said the government was not considering the cryptocurrencies to be a legal method of payment and that the authorities would undertake all the necessary measure to eliminate their use in criminal activities.
Jaitley did not specify any concrete measure that the government intends to undertake to suppress the alleged use of the cryptocurrencies for illegal activities. Moreover, the minister did not announce the ban of bitcoin. However, since India has a share of 10% in the volume of all the bitcoin transactions in the world, it looks like this statement from the Minister of Finance put a lot of pressure on the already bad situation on the cryptocurrency market.
Just a few hours after the statement of the minister Jaitley, the total market capitalization of the global cryptocurrency market went down from 515 billion dollars to 489 billion dollars, which is a drop of around five percent.
January proved to be one of the worst months for bitcoin in its recent history and many different factors are to be blamed for this.
Unfortunately, it seems the world’s leading cryptocurrency has not yet recovered from these problems, while the ongoing regulatory tension is pushing the price even lower. The current price of bitcoin is around 8,800 dollars per coin.
However, when it comes to India, it seems that the media in the country are communicating incorrect information about the ban of bitcoin by the authorities, which largely contributed to the drop of the price, even more than the statement from the minister Jaitley. This is why we should not be surprised if bitcoin recovers quickly, since the traders and investors have more accurate information about the market situation than certain media outlets.
In the meantime, Ethereum is slowly getting closer to bitcoin when it comes to the total market capitalization. While other leading cryptocurrencies follow the bad performance of bitcoin, the price of Ethereum managed to go up slightly. The price of Ethereum reached 1,122 dollars per coin on Bitfinex, with the market capitalization of around 109 billion dollars and 22% share of the cryptocurrency market.
Major altcoins are suffering as well these days. Ripple suffered a drop of around 7% to around one dollar, while Bitcoin Cash and Cardano dropped by 8%.
EOS was the most affected coin with the drop of 9%, while Stellar, NEO and Litecoin went down 7%. The price of NEM dropped by 4% to 0.74 dollars.