The report by Bloomberg caused a massive sell off and decline in prices of bitcoin, ethereum, ripple and nearly all other cryptocurrencies out there being actively traded on cryptocurrency exchanges. Marathon Patent Group (MARA) was off 7.4%, Bitcoin Investment Trust (GBTC) tumbled 13.3%, Riot Blockchain (RIOT) fell 8.6%, Overstock.com (OSTK) was down 5%. The cryptocurrency has now fallen 40 percent since its all time high of $19,343 in December, according to Coindesk prices.
Regulators across the globe, in countries including China, India, Brazil and South Korea, have been warning investors about the risks of trading in cryptocurrencies.
South Korea has been trying to shutdown in speculative cryptocurrency trading in the recent months, because interest in the market has erupted.
Officials in Denmark, Japan and Singapore have issued warnings about trading Bitcoin and other currencies.
The cryptocurrency market has lost over United States dollars 130 billion in market cap in the last 24 hours.
Cryptocurrency is a murky market with frequent swings.
"The finance minister made it clear they're definitely considering banning crypto trading - and it's probably the third-largest market", said Neil Wilson, senior market analyst in London for online trading platform ETX Capital.
The price of bitcoin slumped by 15 percent to drop below $12,000 for the first time since December 4.
Ripple's XRP token has been falling for nearly two straight weeks as news of possible regulatory ramp-ups in both South Korea and China bring a relative chill to red-hot cryptocurrency markets.
Other cryptocurrencies fell by almost as high as 40 percent in a 24 hour period on Tuesday.
That pushed ethereum's market capitalization down to $108 billion and lowered ripple's value to $53 billion.
China is apparently accelerating its clampdown on cryptocurrency trading, Bloombergreported. He believes the light trading volume caused bitcoin's price to plunge.