While it’s not Freddy’s Friday the 13th, for many cryptocurrency hopefuls, yesterday’s events were just as scary. In a short 24 hour window culminating at 11:32 am HK/SIN time on Friday the 12th, the whole market capitalization of cryptocurrencies had fallen by an incredible $6.72 billion. XRP and Ethereum were hit the hardest, although Bitcoin felt the drop as well. The dreaded crypto crash.
Thursday was no picnic either for cryptocurrencies, as an across the board sell-off wiped nearly $13 billion off of the market, this is just in a matter of hours.
What is Causing the Steep Drops?
Right now, there is no clear cause of these steep drops. There is speculation that it was caused by recent negativity regarding cryptocurrencies from important financial institutions and figures. Elizabeth Warren, for example, Massachusetts Senator and potential presidential contender from the left, issued a clear warning about the dangers of cryptocurrency in a Senate Banking Committee on Thursday morning. Her major concerns are the scams it inspires and the difficulties it raises in protecting users. Her concerns were echoed by Alabama Democratic Senator Doug Jones and Senator Sherrod Brown out of Ohio.
In a similar vein, the International Monetary Fund released a report. It addressed the possibility of crypto assets bringing a host of new weaknesses to the international financial system. Additionally, economist Nouriel Roubini named it to be “the mother of all scams and bubbles”, also on Thursday.
The massive plunge in crypto crash could also have been a part of the massive market declines. Financial markets around the world experienced sharp falls on Thursday and Friday. The Dow Jones Industrial Average fell by over 500 points, and the S&P 500 closed under its 200-day moving average. Many Asia stocks were able to recover. However, Commonwealth Bank of Australia stayed flat, and the energy sector was down by 1.5%. On the commodity side, gold spot dipped by 0.39% following a 2.5% jump on Thursday, which had been its biggest percentage gain since early summer of 2016.
Late last night saw nearly all cryptocurrencies in the deep red zone. Bitcoin had lost 4.33% over the 24 hour period and its price was down at $6274 a coin. Ethereum was down by 11.38%, with coin cost at $199. Ripple (XRP) lost 12.22% and was $0.41 per coin. In this morning’s market news, Ripple has made the best and quickest recovery, gaining 19% from yesterday’s low.
For Bitcoin, Ripple, and Ethereum, this year has been one long fall, with their current values being far from the record prices reached at the end of 2017 and the beginning of this year. But many remain hopeful that cryptocurrency will surprise everyone again with a strong bounce back.
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