Bitcoin’s market cap dropped $13 billion in minutes as the cryptocurrency experienced a sudden and unexpected plunge in value today. This saw other top digital currencies lose significant gains on the day, which colored the market red. As such, here are the reasons behind bitcoin’s sudden price drop.
The price of major digital coins plunged on Thursday with nearly $13 billion of value being wiped out in a matter of hours. At around 10:30 a.m. HK/SIN, bitcoin’s price had lost 5% to $6,303, while Ripple (XRP) and Ethereum (ETH) both tanked over 10%. This saw $13 wiped out from the market.
The top three digital currencies have not managed to recover to their record highs as witnessed towards the end of 2017 and the beginning of 2018. On Thursday,11 October, bitcoin had lost about 68% of its value since the all-time highs in December 2017. These losses have shocked many investors owing to the increased adoption witnessed this year.
Reasons behind Bitcoin’s sudden Price drop
Bitcoin’s sudden price drop followed warnings from financial authorities about the rapid growth of digital coins and the potential threat to the economy. According to a report by the International Monetary fund,
“Continued rapid growth of crypto assets could create new vulnerabilities in the international financial system.”
This shocked many investors since they expected 2018 to be a year where regulators would warm up to the idea of professionalizing the trading of digital assets through new financial products such as the exchange-traded funds.
Additionally, another major reason is the bitcoin whales. These are typically classified as individual entities that own large amounts of cryptocurrency and are said to exert influence on the market volatility. As such, these whales may have played a huge role following the sudden drop in prices.
Based on your personal assessment regarding the crypto industry, do you think whales have a part in the current bears?
Share your views in the comments section below