Part of what made Bitcoin and other cryptocurrencies lucrative was the lack of regulations that govern the market. Given this reality, the numbers of altcoins have spiked over the last years while investors became greedy to try and find the next Bitcoin.
But a just a few days ago, many believe that the cryptocrash has begun. In fact, all top 100 digital currencies were down between 15% to 30%. Also, the market capitalization for the total cryptocurrencies now hovers around $450 billion from $650 billion two days ago.
Bitcoin was also hovering just above the $10K mark. Just a month ago, Bitcoin had a bullish trend almost reaching $20,000 in mid-December. Ethereum is currently trading at $974.56 as of writing this article. Interestingly, there is only one digital currency from the top 50 that isn’t down in the last seven days. Tether was able to hold its ground after major cryptocurrencies crashed.
Fear of Regulatory Action
It was a rumor for quite a few days that Asian countries are moving towards stricter rules when it comes to cryptocurrency trading as well as the mining industry. And this is true; South Korea was the latest country to raise concerns over banning cryptocurrencies for good.
You can blame South Korea for its move. One, digital currencies are quite popular in the country. In fact, exchanges are even selling cryptocurrencies for a premium price in the country. In case of a crypto crash, it can definitely affect South Korea’s economy. Secondly, they have North Korea as their neighbor. There were already suspicions that Kim Jong Un’s North Korea has been hacking cryptocurrencies from digital currency exchanges in order to fund its activities.
It isn’t just South Korea that is taking cryptocurrencies seriously. In fact, China is continuously moving towards stopping the use of digital currencies. In September, China banned Chinese digital currency exchanges as well as ICOs. The government even ordered to monitor electricity usage in order to crackdown mining operations. And China isn’t even stopping there. China is now prepared to block domestic internet users from having access to international digital currency exchanges.
In fact, even the US is now taking a closer look at how it can revamp its rules when it comes to cryptocurrencies. Treasury Department’s Inspector General mentioned in the report that it has recommended the IRS to take a closer look at its policy when it comes to digital currencies.
But is it all there is to it? There is a possibility that the price slump is due to the natural shifts in the cryptocurrency market. In fact, there are some experts that are looking into the possibility of an increase in cryptocurrency’s price in the coming weeks since Wall Street employees have already received their year-end bonuses from the weekend.
Will digital currencies continue to slide down in value for the next days to come? Will there even be a chance that Bitcoin and other digital currencies bounce back from its bearish trend? Are we going to see the end of a Wild West scenario in the cryptocurrency world? And could this actually be enough to decline its popularity?