Bitcoin price has dropped nearly by $2,000, recording the strongest decline in three weeks as traders are resisting overbought conditions and rumors of tighter regulations.
The market sell-off accelerated after Coinbase CEO Brian Armstrong warned of a likely tightening of US cryptocurrency regulations. On his Twitter account, he said that the company "heard rumors" of plans by US Treasury Secretary Stephen Mnuchin to introduce new rules for "self-custody wallets."
Last week we heard rumors that the U.S. Treasury and Secretary Mnuchin were planning to rush out some new regulation regarding self-hosted crypto wallets before the end of his term. I'm concerned that this would have unintended side effects, and wanted to share those concerns.— Brian Armstrong (@brian_armstrong) November 25, 2020
Regulation restricts many of the privacy features. Armstrong noted that under such rules, users will need to verify the identities. This could potentially compromise their financial privacy.
At the time of writing, the flagship cryptocurrency is hitting an intraday low of $17,150, more than 12 percent below its annual peak of $19,500 set the day before.