On one hand, premiers of UK, Sweden and the US are showing trust towards the future of cryptos whereas countries like China, South Korea and Bangladesh are lamenting the echo of distrust.
Debates are on and so are the doubts. It cannot be denied that the spectre of crypto currencies is haunting the global capitalism. The recent massive drops in the Bitcoin trading which were down to 14.3 percent as on Wednesday, 1:06 IST, has sent down ripples in the market yet again.
Few experts are optimistic about its recovery, but the analysts are blaming the rush by various jurisdictions to regulate the sector for the plummeting value of crypto market.
Here are few more reasons that have possibly affected crypto market:
The Xi factor:
Bitcoin suffered a huge blow when Bitcoin exchange BTC China announced it would stop the trading of crypto currencies in September. There were predictions that its value could surge to as much as $100,000 but China’s crackdown made a dent in the virtual currency.
A question of legitimacy:
The modern age idea that breathed life into a strange and wondrous monetary idea of Bitcoin that was announced in 2008 are still being speculated over several issues. Some criminals started using it for money laundering and fraud. One of the most notorious case being that of Silk Road website, which relied on Bitcoins for exchange transactions to sell illegal drugs.
Market manipulation and monopoly:
A report of Bloomberg confirmed that a group of 1000 investors own 40 percent of all bitcoins in circulation. These investors who own the largest chunk of pie hold enough stake in the crypto market to tip the scale. They could have easily engaged in creating the appearance of high transaction volume by simply selling and re-selling back and forth on small margins.
Hacking and regulatory problems:
This month the US Stock Exchange Commission halted PlexCoin on charges of being an ICO scam and this week it reportedly suspended trading in the crypto company over concerns regarding accuracy and adequacy of information and stock manipulation. Moreover, the popular South Korean exchange, Youbit announced its closure on 20 December after losing 17 percent of all assets. Possibly this could have scared off potential investors.
The Coinbase confusion:
Coinbase announced on Tuesday that it would support buying, selling and trading Bitcoin Cash on its platform. Shortly after the announcement of this support, US exchange startup Coinbase moved to disable trading of its newest asset because of some ‘insider trading’. All this might have just amounted to extra, unwanted confusion that drove away the investors.
The past eight years of Bitcoin has made one thing sure, Bitcoin always manages to bounce back, and the demand for decentralised currency and blockchain technology is here to stay. Let’s hope this hiccup in the crypto-market doesn’t make severe damages.
At the time of writing, the combined market cap of the crypto currencies is $534,346,017,220, with BTC dominance of 38.5 per cent. Bitcoin, the largest crypto currency has plummeted to 14.03 percent in last 24 hours of trading and is currently valued $11,371.90.