Bitcoin price took a hit after the Chinese Government decided to target bitcoin mining amid concerns of power usage and South Korea proposed to ban local cryptocurrency exchanges.
Bitcoin was down as much as 23 percent for the week, on track for its deepest decrease since January 2015, according to Bloomberg.
Bitcoin has little changed, since a single unit valued at $13,637.39, according to Coindesk.com, on January 12, at 8.54am London time.
Bloomberg’s Camila Russo said: “There was big news that Chinese officials are instructing bitcoin miners to orderly leave the country and this is already having its first casualties.
“Today the fourth biggest bitcoin mining operator, VRTBC, said that it’s increasing its maintenance fees to 50 percent from six percent.
“And other bitcoin mining companies have said they are moving their operations elsewhere, where regulation is friendlier and still cheap energy.”
Morgan Stanley is reporting electricity consumption for bitcoin this year could be as great as, or even exceed, that used by global electric vehicles in 2025 and the entire country of Argentina.
Analysts at Morgan Stanley said: “Bitcoin power demand in 2018 (c.120-140TWh equating to 0.6 percent of world consumption, or consumption of Argentina) will, in our view, be bigger than our projected global EV demand in 2025 (c.125TWh), but is still small on an absolute basis and will not likely have a material impact on utility stocks any time soon.”
Bitcoin isn’t the only cryptocurrency seemingly facing struggling conditions, Ripple and ethereum also faced a sell-off over the South Korean trading bans.
South Korea is among the world’s largest cryptocurrency markets and a ban on trading would dry up liquidity in the virtual currencies.
The South Korean Government’s intention is to ban anonymous cryptocurrency trading, rather than trading in general, to ensure traders comply with its rules.
Geoffrey Smith, a finance professor at the W. P. Carey School of Business at Arizona State University said the concerns may have been overblown.
He said: “The Korean Government is requiring bitcoin traders to do so under their real name, not anonymously.”
Ethereum is currently valued at $1,214.2, according to Coindesk.com, on January 12, at 9.08am London Time.
Ripple XRP is currently valued at $2.06, according to Coingecko.com, on January 12, at 9.09am London Time.