The cryptocurrency market is falling without a parachute, with the price of a single bitcoin down to $4,483 as of press time. This is the lowest price since October of last year – which was before the market exploded in value.
XRP, the cryptocurrency behind payments company Ripple, has overtaken Ethereum to become the second-most valuable cryptocurrency. This has happened in the past on a couple of occasions, but this time it looks like it might be a more permanent swap – there is now $5 billion between the two. Ripple has been doing good business lately, which is why XRP has dropped less than its peers.
, the token associated with an open-source blockchain network and non-profit organisation that works with cross-border payments, has overtaken Bitcoin Cash. The latter is suffering because a significant proportion of its network users have defected to a new cryptocurrency created by an Australian computer programmer named Craig Wright.
Litecoin has dropped so much in price that its creator, Charlie Lee, who all of his Litecoins in December 2017, could now buy them back nine times over.
Regulatory pressure
One reason for the drop could be the US Securities and Exchange Commission demanding reparations for , which sets a worrying precedent for a great many businesses.
Bloomberg posits that the US Justice Department’s continuing probe into is harming confidence that the market ever had a real basis.
Another clear driver is the ongoing Bitcoin Cash – mining devices configured for Bitcoin Cash also serve Bitcoin, and as the former is attracting a much greater amount of network power than is usual, Bitcoin is suffering. And Bitcoin is the backbone of the whole system. This is without mentioning the damaging effect on market confidence this dispute is having.
The Wall Street Journal posits that recent reports of from cryptocurrency mining device manufacturers have added to the doom.
One interesting result of the crash is that trading on Bitcoin futures has suddenly become much more popular, according to Bloomberg. These are derivative contracts which allow investors to bet against a commodity, so people can make money wagering that prices will drop.
It’s a horror show for . Take a look at these moves… if you dare.
— CNBC’s Fast Money (@CNBCFastMoney)
Neil Wilson, chief market analyst at Markets.com, told The Guardian: “The crypto bloodbath continues. Things looks like they only get worse from here. Where is the incentive to buy? It does rather look like the bottom is coming out of this market.”
John McAfee had a different take:
People have panicked. But there’s no fucking need. We’re in a bear market. They suck, yes, and not like a hooker with no teeth. But I’m 73 and have seen this dozens of times in many markets. Bear markets are like Winter. It’s always followed by a glorious Spring. Fucking relax.
— John McAfee (@officialmcafee)
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