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$13 Billion Wiped Out of the Crypto Market

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$13 Billion Wiped Out of the Crypto Market

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Since its peak in 2017, it’s undeniable that Bitcoin has lost a great amount of its value. In fact, the market is filled with uncertainty while others are still optimistic that there could be another bull-run. Mike Novogratz thinks that Bitcoin price has already bottomed.

Bitcoin’s volatility has also been low compared to previous months. However, the International Monetary Fund warned investors regarding the rapid growth of Bitcoin and cryptocurrencies saying that it “could create new vulnerabilities in the international financial system”.

On Thursday, around $13 billion has been wiped out of the crypto market in just a matter of three hours. Bitcoin has lost around 5% of its price while XRP and Ethereum lost 10%.

Regulatory Changes

The crypto market’s growth in 2017 was historic. Starting from around $1,000 for Bitcoin, it was able to reach near $20,000 level. With a mix of media hype and the possibility of price manipulation, the crypto market skyrocketed. But in 2018, regulators started to take a closer look on cryptocurrencies.

Experts believe that regulatory clarity can bring stability to the market. And also, it can attract institutional investors. Slowly, institutional investors such as Goldman Sachs and ICE are among the one that have already dipped their toes into the market.

The US Securities and Exchange Commission even considered both Bitcoin and Ethereum as commodities. And recently, there is the anticipation regarding the possible Bitcoin ETF. Though a number of Bitcoin ETF applications have already been denied by the US SEC in recent months including that of the Winklevoss twins, many are hopeful that a Bitcoin ETF could bring institutional investors.

Are Cryptos Really Risky?

There are a number of reasons why IMF would consider cryptocurrencies risky. 2018 has been marked by some high-profile hacks. And though Japan’s FSA has already imposed stricter rules for its crypto exchanges, these instances damaged the reputation of the crypto market. And also, you have scams that have been tied to initial coin offerings.

$600 Billion Wiped Off Since January

Since the crypto market peaked in January, it has already lost more than $600 billion. For Bitcoin, it has dipped around $5,800 in July as well. The price movement according to experts is due to the biggest stock sell-off since February. According to David Thomas who works as the director of crypto broker company Global Block, “Having seen global stock market take a battering in the last 24 hours on trade fears and rising interest rates as well as the price of gold and the VIX Volatility Index Heading Higher, it is strange that we now see the crypto market also following suit”.

Though many remain bullish regarding cryptocurrencies, the reality is that the crypto market has received a beating since the start of January. Many are hoping that it can mimic its 2017 success. However, if you will ask someone like Vitalik Buterin, the co-founder of Ethereum, he thinks that days of getting 1000% returns on your crypto investment are now over. With regulatory changes happening in different parts of the globe, it seems that it might take a while before we see the crypto market to go up once again.

 

John Jayme

John is a crypto investor, enthusiast and copywriter. He is in charge of daily news and other emerging trends in blockchain technology.

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