The price of Bitcoin along with several other major cryptocurrencies has dropped dramatically over the past 24 hours, erasing billions of market capitalization.
Bitcoin fell to a six-month low of more than 10 percent to below $ 7,100 for the first time since May, with no sign of a slowdown in the current collapse.
Ethereum, Bitcoin Cash and Ripple saw losses of between 5 and 15 percent over the last day, and cryptocurrency analysts struggled to explain the sudden collapse, but said: No more losses should be ruled out.
The market movement is in stark contrast to the positive current year in Bitcoin, with the currency's value rising from less than $ 4,000 in January 2019.
Some investors had hoped that Bitcoin would continue to make gains after recent positive developments in the cryptocurrency sector, especially after China and the European Union expressed support for the idea of digital currency backed by blockchain technology.
Chinese President: digital currency an important achievement
Chinese President Xi Jinping described the idea of digital currency backed by blockchain technology last month as an important achievement, prompting a Chinese government newspaper to publish the front-page story on the success of Bitcoin.
The Chinese president said: The world's second largest economy should accelerate the development of blockchain technology.
Bitcoin, known for its highly volatile prices, rose more than 40 percent in two days after the Chinese president's comments, as investors bet Beijing's support for blockchain technology and plans for a sovereign digital process would speed up embracing popular currencies.
This came years after China took a tough line on cryptocurrencies, and the description comes amid rumors that the country is preparing to launch its cryptocurrency next year.
One possible explanation for the mysterious collapse of the Bitcoin price is other developments in China that have seen a new crackdown on illegal platforms.
The state's endorsement of the cryptocurrency appears to be fueling an increase in illicit trading activity, leading to a reaction from the People's Bank of China. Once any illegal platform is detected, it will be stopped immediately.
The bank also warned investors against confusing cryptography with blockchain technology, which supports many cryptocurrencies such as Bitcoin.
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