On Friday morning (UK time) the price of one Bitcoin was down to just USD$8,360. That’s down from a high of almost USD$20,000 in mid December 2017. Over the 24 hours more than USD$100 billion was wiped off of the global cryptocurrency market. Why? Well a whole host of concerns it seems, let’s take a closer look.
Concerns over tighter regulation normally always play a key role in a crypto price fall and this time it was no different. Added worries that the Bitcoin price was manipulated on a major exchange only made the fall more significant.
According to Coinmarketcap.com, total market capitalisation or value of all cryptocurrencies in circulation was just over USD$405billion on Friday morning. This figure was a fall of a whopping USD$112.6 billion from just a day before.
India regulation and Bitfinex
Another huge reason for the plummet was India’s Finance Minister Arun Jaitley announcing that the country plans to “eliminate” the use of digital currencies in criminal activities. Therefore, you guessed it, tighter regulations were on the way.
A New York Times Report from Wednesday claimed that a growing number of digital currency investors were becoming worried that the bitcoin price and other digital currencies have been inflated by the Bitfinex exchange.
To make things even worse, Bloomberg reported on Tuesday that the United States’ Commodity Futures and Trading Commission subpoenaed Bitfinex and a company called Tether in December.
All of these concerns added up and appearing in the same week sent panic through the markets as things escalated even further. You don’t have to go very far back to find more concerning instances either, just last week Coincheck, the Japanese exchange was compromised as hackers made off with over USD$500 million worth of “NEM” currency.
While many still see the long-term potential of Bitcoin and other cryptos, the last seven days have done nothing to build confidence already reeling from the slide since December.
Investors, will you be holding out?
— Bloomberg (@business) February 2, 2018