Over $30 billion in bitcoin value has just dropped. The price is now below the $10,000 mark. This drop happened quickly in the span of a day as the sell-off begins to deepen. The last time the bitcoin saw a drop like this was back in November last year. Meanwhile, the ripple and ethereum, the second and third largest digital currency assets are continuing to move lower.
All cryptocurrencies are seeming to sell off right after the Finance Minister of South Korea stated that their country was still upset over the shutdown of their crypto exchanges. According to initial reports out of South Korea, the move to clamp down on virtual currency exchanges last week is what caused the price of bitcoin and other digital forms of assets to drop. Currently, South Korea had the largest cryptocurrency markets in the whole world.
The reaction to the South Korean exchanges being shut down seems a little over-dramatic. However, it is a very normal type of reaction for a market such as this. In reality, all it did was drop the value of the bitcoin back down to what it was averaging just a month ago.
No Additional Justification Beyond Fear
Fear seems to be the likely cause of the recent drop in bitcoin value. China is now looking to crack down on their own cryptocurrency markets this coming week as well. It was reported by Bloomberg that the Chinese authorities were planning on blocking all domestic access the markets both in China and offshore. The regulators are also going to begin targeting the companies and people that offer the settlement, market-making and clearing services for the centralized trading exchanges.
Last Tuesday, a bank official from the Chinese central bank stated that the authorities should also ban cryptocurrency trading that is centralized. This just added more weight to the already growing concerns that China is trying to further suppress their country’s cryptocurrency market. Many are seeing a trend that could result in the further decline of the crypto markets.
All cryptocurrencies, including bitcoin, are very volatile assets. Countless experts feel that the introduction of some futures contracts for the cryptocurrencies will end up taming the world of digital currency and somehow bring in more of our institutional monies. The panic from the recent revelations that caused the drop in bitcoin value has lead many bitcoin owners to sell with no other reason beyond fear
Dil Bole Oberoi
