Antonio Manaytay – Fourth Estate Contributor
Cupertino, CA, United States (4E) – Top cryptocurrency Bitcoin continues to tumble for two consecutive days beginning Wednesday, January 17, losing $36 billion of value in a day as its price hit the lowest at under $10,000 since November. The downward spiral of Bitcoin and other major cryptocurrencies was fuelled by fear of possible tougher regulations.
Initially trading at $9,958.31 around 6:50 a.m. ET Wednesday, the Bitcoin dived to about 12 percent in 24 hours then recovered to 10,551.48 at 7:45 a.m. ET, CoinDesk data said.
During the fall, some $36 billion of value was shaved off the cryptocurrency.
Ethereum, the next biggest cryptocurrency after Bitcoin, also moved lower. Ethereum was traded at $892 for every coin then it eased to $907.31 at around 7:45 a.m. ET.
The sell-off was triggered by South Korea’s announcement it is considering to close all cryptocurrency transactions. South Korea is one of the internet money markets worldwide.
“The action we’re seeing may seem dramatic but it is really quite normal for this market,” eToro senior marketing analyst Mati Greenspan in an email to CNBC said.
The decline, Greenspan said, had “brought us back to the prices that were traded about a month ago.”
South Korean and Japanese investors usually paid the premium at about “20 percent or more per coin. On Wednesday, however, these investors appeared to have not done so.
“The premiums that were being paid by Japanese and South Korean crypto traders is also coming down, so that’s a good sign as well,” Greenspan pointed out.
Despite the steady and sharp decline, the good news is that the negative trend was caused only by fear as China had also announced it would ban the centralized trading of cryptocurrencies.
According to Bloomberg, Chinese officials said they are planning to block access to Chinese and China’s cryptocurrency platforms, which move was part of the planned crackdown against cryptocurrency.
CryptoCompare chief executive Charles Hayter said most of the investors are expecting the decline.
“The market was very overheated and had significantly dislocated from the trend. A large percentage of investors were expecting this correction and reversion to mean,” he explained.
Hayter, however, said no one knows where the market would lead to as sell-off continues “with no other justification than fear.”
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