Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why Bitcoin, Ethereum, Dogecoin, and Other Cryptocurrencies Plunged Today

By Joe Tenebruso - Sep 24, 2021 at 4:18PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Regulatory risks are rising for investors.

What happened

Cryptocurrencies fell on Friday after China furthered its crackdown on the industry. Here's how some of the most popular cryptoassets were performing as of 3:30 p.m. EDT:

  • Bitcoin ( BTC -2.02% ), down 6%
  • Ethereum ( ETH 1.18% ), down 8%
  • Litecoin ( LTC 0.28% ), down 9%
  • XRP ( XRP 1.24% ), down 7%
  • Dogecoin ( DOGE 0.68% ), down 7% 

So what

Earlier this year, China banned cryptocurrency mining, an energy-intensive process that has drawn criticism from environmentalists for its potential to contribute to climate change. Chinese regulators also forbid the country's financial institutions from providing services to crypto-focused companies. 

A chart is displaying declining cryptocurrency prices.

China's regulatory crackdown created a sea of red in the cryptocurrency markets on Friday. Image source: Getty Images.

Today, China's central bank took the next step and declared all cryptocurrency-related activities illegal. This includes trading cryptocurrencies and their derivatives on foreign exchanges. 

Now what 

Regulators around the world have been stepping up their scrutiny of the crypto markets in recent months. Some are striving to protect people from fraud, theft, and other scams that have already led to billions of dollars of losses for investors. Others are seeking to reduce the industry's energy usage and waste production. And others want to prevent nefarious actors from using cryptocurrencies to launder money, fund terrorism, and evade capital controls.

Regulatory and law enforcement agencies are also taking a closer look at Tether ( USDT 0.01% ) and other stablecoins. Industry watchers are growing increasingly concerned that a collapse of a major stablecoin could threaten the stability of not just cryptocurrency exchanges but also the financial institutions that support them. Tether alone claims to possess assets of more than $69 billion. 

These heightened regulatory risks are leading many investors to rein in their near-term growth expectations for the crypto industry -- and many chose to sell Bitcoin, Ethereum, and other cryptoassets today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Bitcoin Stock Quote
$49,627.53 (-2.02%) $-1,022.57
Dogecoin Stock Quote
$0.18 (0.68%) $0.00
Ethereum Stock Quote
$4,360.97 (1.18%) $50.79
Litecoin Stock Quote
$162.49 (0.28%) $0.46
Ripple Stock Quote
$0.83 (1.24%) $0.01
Tether Stock Quote
$1.00 (0.01%) $0.00

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/08/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.