Bitcoin Gravy Train Has Hit The Buffers

0
1475

The cryptocurrency gravy chain that saw so many investors make huge profits from soaring investment values seems to have hit the buffers.

All the major cryptocurrencies other than Ethereum are trading down and have a market value that is at least a huge 50% below the highs of only a month ago.

In recent days, Bitcoin and Litecoin have lost 10% of their value, while Ripple is down 23%.

The downgrade has also rippled out across most well-known cryptocurrencies –   out of the top 100, 79 are dropping in price.

Cryptocurrencies in crisis?

Bitcoin, which hit a peak of $20,000 in December, after rising from around $900 a year ago, is now trading at less than $10,000. Still a pretty profit for investors who have held their nerve in the market for 12 months or more, but not so good for those jumping on the bandwagon at the close of 2017.

Analysts say in previous cryptocurrency self-offs, it was not hard to spot the money shifting out of Bitcoin into one of the digital currency’s rivals, pushing their prices up. This time no such thing is happening – prices are dropping across the board, which probably means investors are taking their profits and moving the money away from cryptocurrency.

Rotating investments is not uncommon – stock market traders move their money between defensive and cyclical stocks regularly, according to market conditions.

Fears of market manipulation

Bitcoin lost billions in January – the drop in value saw the trading accounts of investors shrink by $44 billion, making the monthly loss the largest ever for a digital asset.

Cryptocurrency values probably still have a way to fall before they find a base again, which could see losses for thousands of small investors who are less likely to stand the pain.

The way the market is moving leads to some suspicion the market is being manipulated – and that adds to the concerns of investors who are seeing their profits drain away.

Add to that the way governments are planning to rein in cryptocurrency and worries over losing money to hackers, and the road ahead looks bumpy.

US tax and regulatory agencies are already looking at Coinbase, Bitfinex and Tether.

Leave a Reply