Cryptocurrency prices dropped Friday, extending the week’s selloff, after new comments from the Chinese government spurred fears of a regulatory clampdown in a country where most bitcoins are created.
Bitcoin fell 12% to $35,263 and ether declined 19% to $2,248.80 as of 5 p.m. ET Friday after China’s government, following a meeting led by 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.
Much of the global supply of bitcoin is created in China, but the industry causes Beijing headaches, both because of the electricity-intensive process to create it and the financial-system risks posed by a volatile investment product authorities can’t control.
Before the comments, bitcoin had been trading near $41,000.
The timing of China’s statement, late on a Friday evening, and the fact that the meeting was run by Mr. Liu, President Xi Jinping’s right-hand man on the economy, adds teeth to the directive.