Cryptocurrencies have lost close to 40% of their value since the start of September
The digital currency market has suffered sharp declines in the last few weeks, losing close to 40% of its market value amid a widespread sell-off.
The total market capitalization (market cap) of these digital assets reached as little as $112 billion today, which represented a 37.7% drop from its all-time high of $179.8 billion, according to CoinMarketCap.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Crypto Market Volatility
The cryptocurrency market has experienced some ups and downs since reaching a record high, falling below $135 billion on September 5 and then recovering to more than $165 billion on Friday, September 8, additional CoinMarketCap figures show.
After dropping to approximately $146 billion September 8, cryptocurrencies fluctuated within a reasonably modest range for the next several sessions.
Growing Regulatory Scrutiny
The total market cap of these digital assets moved within this range while the Chinese regulatory environment became increasingly hostile.
Earlier this month, China declared that initial coin offerings (ICOs), innovative sales that companies can use to make money, are illegal.
These ICOs have also drawn scrutiny from U.S. regulators, as the U.S. Securities and Exchange Commission recently announced that the digital assets sold in these offerings can potentially be considered securities, making them subject to securities laws.
British regulators have also gotten involved, with the U.K. Financial Conduct Authority announcing September 6 that it was investigating these digital assets, according to The Financial Times.
BTCC Shuts Down
While government scrutiny can signal difficulty ahead, exchanges shutting their doors to traders is a completely different matter.
Earlier today, Chinese cryptocurrency exchange BTCC revealed that starting September 30, it will no longer offer trading of digital assets.
However, it did announce that its other service offerings, for example BTCC Pool, will continue business as usual.
Crypto Markets Plunge
Cryptocurrency markets reacted sharply, with many cryptocurrencies suffering notable losses.
These declines helped pull the total digital currency market lower, resulting in its market cap falling upwards of 20% today.
Currently, several media outlets have reported that more Chinese cryptocurrency exchanges will follow BTCC and halt trading of these digital assets, according to Business Insider.
Should these rumors materialize, it could provide the digital currency markets with significant headwinds, triggering further losses and undermining the gains that cryptocurrencies have made this year.