Bitcoin fell more than 20% as France added its voice to a growing list of nations becoming wary of the volatile and potentially damaging trade in virtual currencies.
On Monday, France's economy minster Bruno le Maire announced his "digital currencies mission" that includes a working group to investigate how digital currencies are traded and propose the best standards by which to regulate such trade.
"We want a stable economy and reject the risks of speculation and the possible financial diversions linked to bitcoin," le Maire said.
The minister has chosen former central bank deputy governer Jean-Pierre Landau to head the "mission". Landau wrote in the Financial Times three years ago regarding bitcoin in an editorial entitled: Beware the mania of bitcoin, the tulip of the 21st century.
Speculative bubble fears
Comparing the cryptocurrency market to the 16th century mania for tulips in Europe and the speculative bubble that ensued, Landau wrote: "Bitcoins are the tulips of modern times. The longer this mania lasts, the more investors are likely to be burnt."
France is only the latest of several nations to become wary of the speculative mania surrounding digital currencies.
China and South Korea
China's authorities are attempting to ban the trade of cryptocurrencies. It has already outlawed initial coin offerings (ICO) and has closed many domestic exchanges in order to limit its econonic exposure to a potential bubble.
Meanwhile, South Korea's finance minister Kim Dong-yeon said in a radio interview on Tuesday that authorities were considering a crackdown which could result in a ban on virtual currency trading.
By mid-morning in London, the price of bitcoin had fallen 14.34% to $11,639. Here's the other market action:
- Ethereum down 20.77% to $1,041.60
- Ripple down 27.86% to $1.30
- Litecoin down 15%to $200.73
- Stellar down 28.23% to $0.4491
- Cardano down 26.17% to $0.603
- Cryptocurrencies react to South Korea’s bill to ban trading