It took some time but it finally happened. The top 10 cryptocurrencies have all shed their gains from last year. Cardano, which rallied towards the end of last year, is the biggest loser, having lost 73% of its value since the start of this year. With losses of 70.3% and 63.6% each, Ripple and Bitcoin Cash are not far behind. NEO held out against market forces the longest. As of this morning, however, its price is roughly 8% below its price at the end of last year.
At 17:01 UTC, the price of a single bitcoin was $8,124.96, roughly unchanged from its price 24 hours ago. Earlier this morning, it had reached a low of $7712.61. Among the top 10 cryptocurrencies, Stellar and Cardano shed the most from their prices in the last 24 hours. Monero, a privacy-focused coin which had tumbled out of the top 10 due to a delay in its proposed hard fork, was back in the rankings after NEM’s price collapsed by more than 21% in the last 24 hours. The overall market cap for cryptocurrencies fell to $321 billion, down from $354 billion 24 hours ago. As this CNBC headline makes clear, the losses were even more significant earlier and amounted to $60 billion.
What Caused The Collapse?
A mix of news developments are responsible for the swoon in cryptocurrency markets. Google announced plans to ban advertising related to cryptocurrency products. The SEC has also made a number of moves recently that suggest it might soon start wielding the regulation axe to clear the ecosystem. Added to this is the prospect of a hack at Hong Kong-based Binance, one of the world’s biggest cryptocurrency trading exchanges. The bears are also out in full force against bitcoin. A senior executive from Allianz Global recently published a blogpost that referred to bitcoin as being “essentially worthless”. Thomas Glucksman, head of APAC business development at Gatecoin, told CNBC that “bear signals have subsequently spooked many new crypto investors who are now looking to cut their losses.”
Perspective Is Necessary
At first glance, a decline of 31.6% in overall cryptocurrency market in 10 days might seem like a steep drop. But things are not as bad as they were earlier this year. For example, cryptocurrency market valuations crashed by 41.4% within a single week towards the end of January this year. Within the space of two days between Jan 15 and Jan 17, they fell by 39.7%. In both those instances, traders sold holdings on fears of increased regulation for cryptocurrencies. In contrast, the recent pullback in funds has been a relatively gradual one. Whilst it is not welcome, the pullback might set the scene for another bump in cryptocurrency valuations. This time, it might be on a surer footing vis-à-vis regulation.