Over $200 Billion Wiped Out Off The Value Of Cryptocurrencies
More than $200 billion has been wiped off the value of global cryptocurrencies following a massive sell-off that extended until Wednesday morning. Investors dropped their crypto-fortunes following a series of hacks and scam warnings compounded fears that regulators would crack down on the budding digital assets.
At around 7 a.m. London time on Tuesday, the total market capitalization of all global cryptocurrencies stood at $653.8 billion. This was before the massive sell-off began with the value of the top 20 cryptocurrencies being decimated. After the sell-off subsided, the market cap had plunged by Tuesday evening to a low of $450.5 billion.
The price of Bitcoin lost 16.5 percent of its value dropping to well below $10,000, plunging to as little as about $9,200, less than half from its highs a few months ago. The second most valuable crypto-coin, Ethereum, was down 20 percent while Ripple's XRP lost 26 percent of its value.
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The sell-off was reportedly triggered by worries over tighter regulation in the key markets of South Korea and China. Just last week, South Korea's justice minister announced that his ministry is preparing a bill that would ban cryptocurrency exchanges.
On the other hand, China announced their plans to help cryptocurrency miners "slowly exit" the industry by removing special privileges such as low-cost electricity. On Tuesday, Chinese central bank also urged authorities to ban the centralized trading of virtual currencies.
The fears of regulation were compounded by news that Bitconnect is running a Ponzi scheme. According to several influential investors, which includes Ethereum co-founder Vitalik Buterin and billionaire cryptocurrency investor Mike Novogratz, claimed that the popular, albeit controversial site for trading and lending cryptocurrencies is involved in such as scam.
For several days this week, the company was reportedly under attack known as a denial-of-service preventing users from making withdrawals. Following the shutdown, users also reported problems when they tried to sell their positions. Bitconnect has yet to a statement regarding the allegations.
