Crypto prices have plummeted.
Since peaking in December, crypto prices have plummeted, with Bitcoin falling below $6,000 and Ethereum below $500. The sell-off has been driven by a combination of regulatory worries, hacking fears, and a general sense of market exhaustion after a frenzied 2017. While some investors remain bullish on the long-term prospects of digital currencies, the recent price drop has spooked many newcomers to the space.
Crypto Prices Plummet Amidst Economic Uncertainty
Cryptocurrencies are experiencing a sudden and dramatic price decline on Wednesday, amid the ongoing economic uncertainty.
Bitcoin is down 8% at $6,386 as of press time, while Ethereum is down 9% at $315. Ripple is also down 10% at $0.74.
The sell-off is likely due to overall uncertainty around the global economy, as well as renewed fears of a tech bubble.
Earlier this week, the World Economic Forum released a report warning of a potential financial crisis in the coming years due to increasing economic uncertainty.
This week’s sell-off follows a similar pattern to that of December 2017, when cryptocurrencies saw a sharp drop following the US election.
Bitcoin, Ethereum, and Other Cryptocurrencies Suffer Sharp Price Drops
The total market capitalization of all cryptocurrencies has fallen by more than $40 billion in value since the beginning of the month, according to data from CoinMarketCap. Bitcoin, Ethereum, and other major cryptos are all down over 30% from their all-time highs.
The sharp price drops come as several major exchanges have been hacked in recent weeks. The biggest such theft so far was the $530 million theft from Japanese exchange Coincheck.
Panic selling causes crypto prices to crash
Cryptocurrencies are highly volatile and can be affected by a number of factors including fear, panic selling and regulatory uncertainty. When these factors combine, they can cause prices to crash.
For example, in December 2017, Bitcoin prices fell by almost half when investors began to panic sell. This led to a general decline in the market and a subsequent price crash.
Similarly, in January 2018, Bitcoin prices crashed after South Korean authorities announced plans to regulate the cryptocurrency sector. This caused a wave of panic selling, which in turn led to a sharp decline in prices.
Cryptocurrencies are extremely volatile and can be very sensitive to changes in the market. Therefore, it is important to be aware of the risks associated with panic selling and invest cautiously.
Cryptocurrencies take a hit as investor confidence wavers
Cryptocurrencies took a hit as investor confidence wavers
Investors pulled money out of digital currencies Thursday, as global stock markets wobbled and concerns mounted about the outlook for the global economy. Bitcoin and other cryptocurrencies slid as much as 10 percent in value.
The market turmoil comes as authorities in South Korea and Japan consider how to regulate digital assets. Japan's financial regulator said earlier this month that it is studying ways to create a regulatory framework for digital assets.
Bitcoin has been on a tear this year, rising more than 1,500 percent. But some critics say the digital tokens are a Ponzi scheme, and that the market is headed for a crash.
"The recent price fall may reflect market concerns about global economic conditions and regulatory responses to cryptocurrencies," said Jeremy Allaire, CEO of a Canadian digital currency company, Circle.
What caused the crypto market crash?
There is no one answer to this question as there are a variety of reasons why the crypto market may have crashed. Some of the reasons could be due to regulatory changes, hacks, or general market volatility.
Why did crypto prices suddenly drop?
Cryptocurrencies are volatile, and prices can rise and fall quickly. This is partly due to the fact that cryptocurrencies are not backed by any government or central institution, and there is no guarantee that they will continue to be worth anything. Some people may also be selling cryptocurrencies in order to buy other cryptocurrencies or fiat currency, which can cause the price to drop.
How low will crypto prices go?
Crypto prices are highly volatile and can move quickly in either direction. While there is no certain answer, we believe that prices could dip below $1,000 again in the near future.
