TheBull.Asia

Wednesday 21

November, 2018 7:16 AM


The Quotes are Powered By Investing.com, the Forex, Futures, and Stock Markets Portal.

Panic hits global crypto market as Ethereum drops 10%

Panic hits global crypto market as Ethereum drops 10%

The global cryptocurrency market suffered another large blow yesterday, as the digital currency Ethereum followed up Monday's drop of 17% in value with another decrease of 10% on Tuesday.

Share |

By Nigel Frith 15.08.2018

The global cryptocurrency market suffered another large blow yesterday, as the digital currency Ethereum followed up Monday’s drop of 17% in value with another decrease of 10% on Tuesday.

The cryptocurrency market as a whole is struggling around the world, losing 10% of its market value in just one day. The current turmoil surrounding the Turkish lira and Turkey’s economy in general is having a massive knock-on effect on many emerging market currencies around the world as investors look to find surer ground.

The nervousness surrounding this type of sell-off has found its way to digital currencies as well, as Bitcoin dropped below $6,000, which is a far cry from some of its high performances in the last 12 months.

With Ethereum falling to $253.35 just before close in the UK markets, Monday propagated the current predicament for digital currencies, with the main factor not being so sinister.

A Bloomberg investigation suggested that the current drop in value is due to many startups cashing in what they have raised in digital currencies through Initial Coin Offerings (ICOs) and trading them in for fiat currencies. This allows them to invest in their businesses and begin an additional stage of development. Although this may not help the outlook of the market, it is one of the reasons that cryptocurrencies have high value as an entity and appear to show their worth.

eToro Analyst Matthew Newton said that the cryptocurrency market is in “panic mode” right now, with “prices falling significantly”. Newton confirmed that this is partly due to the trend of investors and companies “increasing liquidations of their ICO holdings”, which naturally changes the saturation point of the market. This leaves Ethereum with a suddenly increased level of volume and a drop in demand that traders have not met, as they may be playing it safer in the current market.

According to CoinMarketCap.com, one of the leading digital currency sites, the overall crypto market has dropped 10% and plummeted from a total value of $218bn to $193bn.

Bitcoin, the cornerstone of digital currency and measured as the most important marker of decentralized currency performance, has also seen negative effects. In Tuesday’s trading session, it dropped below $6,000 before rallying back to close at just over $6,020. The $6,000 mark is a relative checkpoint for Bitcoin in terms of how far it has come since inception and how seriously people take it as a reliable currency indicator.

Other major cryptocurrencies saw similar performance issues, with XRP down 6.2% to $0.25, Litecoin dropping 8.7% to $51.57, Stellar down 6.1% to $0.21 and EOS falling 6.4% to just $4.34. Market jitters seem likely to spread through all less established markets.

The US Securities and Investments Commission is also affecting struggling digital currency markets, as it announced in June that it would not yet seek to approve a Bitcoin-funded exchange-traded fund (ETF). The lack of federal confidence in crypto is not surprising to crypto investors, but it may well concern potential outside traders. Bulls were also supportive of any potential change from the US SIC, as the market size would have dramatically increased.

Hussein Sayed, Chief Market Strategist at FXFM, said that he expects “regulators will continue to fight against bringing cryptocurrencies into the mainstream” and unless an ETF launches fairly soon, the selloff would continue.

Live Forex Prices

AUSTRALIAN STOCK QUOTE

Don't know the company code? Click here




PLEASE SUPPORT OUR SPONSORS, ASIA'S LEADING BROKERS:



© Copyright The Bull. All rights reserved.