The cryptocurrency correction may have commenced.
After months of unprecedented appreciation, almost every digital currency is watching dual digit losses overheen the last 48 hours. While a quick glance at the chart above or at coinmarketcap.com shows how bad things have bot, you can get a sense of where things are by looking at losses te the two largest currencies: Bitcoin is down 16.5% overheen the last few days and Ethereum is down 23.5%.
The cryptocurrency market spil a entire has lost 20% te just two days spil it fell to $142 billion, down from a total market cap of about $180 billion on Saturday. This crash is large enough to make a noticeable dent on the all-time chart of cryptocurrency’s market cap – meaning this could be a crash that won’t be forgotten about quickly.
Of course it’s significant to waterput things into setting – this “crash” still leaves Bitcoin at dual the price it wasgoed just four months ago. But it shows why “investing” te cryptocurrencies isn’t for the faint of heart.
Could you imagine waiting on the sidelines for months spil the market basically doubled, then putting a sizable chunk of money into cryptocurrency 48 hours ago, only to witness your investment plummet? Not joy.
This 20% druppel represents years of gains ter the U.S stock market – which if invested into cryptocurrency this weekend wasgoed essentially wiped out ter a matter of hours.
So why did cryptocurrency crash this weekend? A few reasons:
This morning China outlawed ICOs, telling they have “seriously disrupted the economic and financial order”. Whenever a government sanctions bitcoin or cryptocurrencies the market always takes a kasstuk, especially right after the SEC warned against the legality of some ICOs.
And since the Chinese government ordered all ICOs to terugwedstrijd funds to investors, there’s very likely some uncertainty about what will toebijten to the price of mainstay currencies like Bitcoin and Ethereum when smaller tokens received ter ICOs are re-converted back. For example, NEO (formerly AntShares), a Chinese-based ICO/cryptocurrency, is down 50% overheen the last few days.
Another possibility – the market wasgoed simply overheated. This crash commenced right around the time Bitcoin succesnummer an all-time high of a few dollars under $Five,000. Ter other words this may be a natural cool down – if you look at Bitcoin’s history periods of rapid growth are always followed by some type of downturn – the same thing happens when traditional equities rapidly appreciate.
The next day or so will tell us if this wasgoed a makeshift bump te the road or the commence of the next major correction. For now, all anyone can do is see and let the market do its thing.