Crypto Prices Drop After Russia Calls for Ban

The price of bitcoin and other cryptocurrencies dropped Friday (Jan. 21) following a sell-off in speculative assets amid the news of Russia’s call to ban crypto in that country.

As the Financial Times reports, the price of bitcoin fell as much as 7.4% against the dollar in Asian trading, while ether dropped nearly 9%, wiping away about $140 billion off the market capitalization for some of the market’s largest cryptocurrencies.

The bitcoin selloff picked up steam on Wall Street late Thursday after Netflix warned that it had seen flagging subscriber growth. Shares in the streaming giant dropped about 20% in pre-market Nasdaq trading Friday.

Andrew Sullivan, managing director at Outset Global in Hong Kong, told the Financial Times Asia was seeing “huge volumes going through in a number of markets as investors move to cash” on Friday, as technology shares in the region fell.

The price drop came one day after Russia’s central bank issued a report that compared cryptocurrencies to a pyramid scheme and rallied for their abolition.

Read more: Russia’s Central Bank Proposes Banning Crypto

The move made Russia — the world’s third largest crypto miner — the latest nation to propose either banning cryptocurrencies or imposing stricter regulations on the digital coins.

In its report, the Bank of Russia said the growth of cryptocurrency was driven primarily by speculative demand and could cause a market bubble that threatened financial stability.

The bank said financial institutions should be forbidden from carrying out operations using crypto and proposed a ban on crypto exchanges. The bank says Russians are active crypto users, buying and selling roughly $5 billion per year.

Read more: SEC Chair: Crypto Will Be a 2022 Priority

Also on Thursday (Jan. 20), U.S. Securities and Exchange Commission Chairman Gary Gensler said cryptocurrency exchanges will be a chief focus of his agency this year.

“I’ve asked staff to look at every way to get these platforms inside the investor protection remit,” Gensler said. “If the trading platforms don’t come into the regulated space, it’d be another year of the public being vulnerable.”