This Tuesday top cryptocurrencies slipped by 13 to 25 percent, but does this mean investors are abandoning digital assets? A superficial analysis will be based on the price of bitcoin that has fallen to just under $12,000, representing a 40-percent drop from its record highs.
Bitcoin was trading at more than 13 percent down at $11,957 per token. Ethereum plunged 18 percent, ripple crashed 24 percent, while bitcoin cash plummeted 23 percent. Market capitalisation of digital money has slid by 23 percent to $593 billion.
As The Token Post predicted many times before Bitcoin bubble could burst & it would be no big deal. The nature of speculation based products like bitcoin is to have price variation. In January 2014 there was a price peak of all cryptocurrencies, Bitcoin achieved 1000$ but eventually they all brutally fell in value. Bitcoin went back to 150$ in the space of one day. So today’s drop is nothing new.
Bitcoin touched highs of $20,000 in December before plunging in the approach to Christmas. Its skyrocketing price last year has attracted institutional investors, but it has also resulted in increased control from what investors fear the most–regulators.
Last week, South Korea announced a crackdown on bitcoin and other cryptocurrencies, but backtracked after negative feedback from the public. China has already banned initial coin offerings and some other operations involving digital currencies. Russia is preparing legislation to regulate cryptocurrencies, while trying to create its own.
Many cryptocurrencies are facing a ‘pump-and-dump’ strategy, which many will be familiar with from the movie, ‘The Wolf of Wall Street.’
Under this strategy, a specific stock is pushed hard and investors are promised large returns. After prices peak, the owner quickly sells as many shares as possible, sending prices down and enjoying the profits.