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Bitcoin falls amid government crackdown rumours

Unfortunately for cryptocurrency traders, the bitcoin price has had another disappointing 24 hours of trade.

At the time of writing the bitcoin price is fetching US$14,516 per coin, according to Coin Market Cap.

This is a decline of 4% over the last 24 hours, reducing its market capitalisation to just under US$244 billion.

Why are traders heading to the exits?

As well as the selling resulting from the confusion caused by Coin Market Cap’s decision to remove the inflated South Korean prices from its site, traders have been heading to the exits amid concerns over government crackdown rumours.

Regulators in both China and South Korea are rumoured to be on the verge of cracking down on the industry.

As these two nations make it a large portion of global cryptocurrency trade, this could have a big impact on prices.

According to the Financial Times in London, Chinese regulators plan to eradicate the country’s bitcoin mining industry due to concerns about excessive electricity consumption and financial risk.

The report indicates that a task force has been set up to instruct provincial governments to “actively guide” companies to exit the cryptocurrency mining industry.

This news could be a blow to high-flying Fatfish Internet Group Ltd (ASX: FFG). Its shares are on fire on Wednesday after announcing plans to spend approximately $1.3 million for a 51% stake in Singaporean cryptocurrency mining startup, APAC Mining Corp.

Its mining activities currently take place in Malaysia, but the company has plans to expand its operations into Mongolia to take advantage of the cheap electricity. There is a danger now that this expansion may not be possible.

Whether these crackdowns will occur is hard to predict. But one thing that is for sure is that the bitcoin price will have a lot of ups and down between now and the end of the year.

Where it ends, though, is anybody’s guess.

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