Bitcoin’s value dropped below $10,000 for the first time in more than a year, bottoming out at $9,199.59 on Wednesday morning, while numerous other cryptocurrencies reported similar steep plummets. The drops followed reports that South Korean and Chinese officials were both considering banning cryptocurrencies, which fueled already-growing speculations that Bitcoin and other cryptocurrencies are a needlessly risky investment.
“There is a lot of panic in the market. People are selling to try and get the hell out of there,” said Charles Hayter, founder of Cryptocompare, which owns cryptocurrencies. “You have more regulatory uncertainty…and because of these falls you have these other outfalls.”
Those other outfalls include the cryptocurrency Ethereum, whose value fell 18% Tuesday; and Ripple, which lost 25% of its value in the same 24-hour period. Etherium and Ripple are the second- and third-largest cryptocurrencies by market value, respectively, after Bitcoin.
Bitcoin itself is down 53% from five weeks ago, when it stood at $19,800 per bitcoin. The currency has had major drop-offs in value before, however: Marc Singer, an adviser at Singer Xenos in Miami, noted that Bitcoin lost 93% of its value over a five-month period in 2011 and again lost more than half its value between November 2014 and January 2015.
More recently, concerns over Bitcoin resurfaced when South Korea’s finance minister said that the government is considering reining in cryptocurrency trading and could ban it altogether. Further stoking fears of a bitcoin crash, a Chinese central banker said separately that the Chinese government should outlaw not only cryptocurrencies but also the businesses that use them.
Legal barriers to cryptocurrency could emerge in other countries. French and U.S. officials recently stated that they will investigate cryptocurrency activities, and the upcoming G20 summit’s attendees are expected to debate the rise of bitcoin when they convene in Argentina in March.