Cryptocurrency prices dropped Friday, extending the week’s selloff, after new comments from Chinese officials spurred fears of a regulatory clampdown.
Bitcoin fell 7% to $37,306 and ether declined 10% to $2,485 after Chinese authorities, including Vice Premier Liu He, pledged in a statement to “crack down on bitcoin mining and trading behavior” as part of broader efforts to guard against financial risk. The statement didn’t provide further details.
Before the comments, bitcoin had been trading near $41,000. Mr. Liu is China’s top economic envoy with Washington and has been a point-person on trade negotiations between the two nations.
The Biden administration’s tax enforcement plan released Thursday also called for businesses receiving more than $10,000 in cryptocurrency to be required to report those transactions.
Cryptocurrencies are facing a reckoning after a phenomenal run since the end of last year that pushed bitcoin, ether and even joke crypto dogecoin to records. The run, partly driven by heightened interest from institutional investors, has stalled in recent weeks. Bitcoin has seen its sharpest declines after
Tesla Inc.
suspended accepting bitcoin for transactions, citing concerns last week over its carbon footprint.
Bitcoin has fallen about 22% this week, with the worth of all bitcoin now valued at about $750 billion, down from more than $1 trillion before Tesla’s policy reversal. Ether is down 36% for the week.
“The market is certainly more nervous about regulatory headwinds. Now that crypto has really stepped into the spotlight in 2021, inviting institutional adoption, it is also going to attract more intense scrutiny from the regulatory side,” said
Joel Kruger,
a strategist at cryptocurrency exchange LMAX Digital.
—Brian Spegele contributed to this article.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com
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