Bitcoin, the world’s largest cryptocurrency market by capitalization, is experiencing some problems. The price of bitcoin has dropped about 12 percent, wiping out around $42 billion of market value over the weekend.

According to CoinDesk’s Bitcoin Price Index, the price has dropped to $6,455.92 during the afternoon trading session on June 12, dropping more than $280 in just two hours. The massive drop represents the lowest point since the beginning of April, extending this year’s slump in bitcoin to more than 50 percent. Additionally, other major cryptocurrencies are also in for a tough road ahead.

Litecoin, which is currently listed as the world's sixth largest cryptocurrency in terms of market capitalization, is now under siege. It’s now approaching $98, a price not seen since December of last year, according to the website.

The latest hacks and the Chinese crackdown on the Cryptocurrency market

Some analysts blamed the latest drops on an exchange hack in the South Korean market. Others pointed to looming concern over a clampdown on bitcoin trading platforms in the Chinese market. Cryptocurrency venues and exchanges have recently come under fire amid a range of issues, which include market manipulation, money laundering, and thefts.

Analysts are blaming the latest drop due to a series of cyberattacks, including the $500 million theft from the Japanese exchange Coincheck.

And it’s not just the Japanese market, the South Korean market is also getting hit. While the South Korean hack is much smaller, the news triggered some sort of knee-jerk selling, according to Bloomberg.

Coinrail already made the explanation on its website that some of its crypto assets could have been stolen by hackers. Unfortunately, the South Korean crypto venue hasn’t disclosed to the public how much its lost in the latest hack.

But it made some explanation about how it runs its ts cryptocurrencies business. Coinrail said that a huge number of its digital currency, which they claimed around 70 percent, is being kept safely in a cold wallet. This cold wallet is reportedly not connected to the internet., which makes it's more secure and less vulnerable to attacks.

According to Bloomberg, two-thirds of the stolen assets have already been frozen and collected, while the remaining have been examined by digital forensics and other cryptocurrency development companies. The South Korea-based Coinrail is currently one of the top venues for cryptocurrency trading, with a 24-hour volume of around $2.65 million. The venue trades more than 50 cryptocurrencies, according to the data compiled by Coinmarket.com.

Meanwhile, in China, the Chinese government will continue its crackdown on illegal fundraising and risks linked to internet finances. The massive crackdown of initial coin offerings (ICOs) and bitcoin exchanges has almost been completed, according to the Communist Party-run People’s Daily.

Banks downgrades and bitcoin futures

In other crypto-related stories, bitcoin could be in serious trouble. The latest story involved some banks and financial rating agencies. According to tech-focused website CCN, some of the world’s top rating agencies may downgrade banks who clear bitcoin futures if these financial assets continue to see increasing volumes in the next couple of months.

Standard and Poor’s, Moody’s, and Fitch have already expressed concern over increasing volume in cryptocurrency markets. Reports said that volume in these crypto markets has grown steadily and exceeded $670 million during a single trading session, according to CCN. The massive surge has already caught the attention of the world’s top worried rating agencies, which reportedly worried that banks are taking on unnecessary credit risk.

As a result, rating agencies have decided to downgrade the creditworthiness of banks who clear bitcoin futures. Normally, rating agencies assign credit ratings in the form of letters. Banks that have been downgraded may have a hard time obtaining access to financial funding. They can also face higher collateral requirements. This limits the amount of credit they can extend or lend to their clients.
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