Close on the heels of a stock market’s plunge in the Asian market following the overnight Wall Street drop; it is the turn of the cryptocurrency to witness a sharp drop in its prices on Thursday. The prices of major digital coins like bitcoin, Ethereum and XRP have taken a beating thus resulting in a loss of about $13 billion in a matter of few hours.
At one point in time, bitcoin price dropped close to 4.15 percent to drop below $6,300 levels. The second-placed Ethereum price plunged 10.8 percent to $200 whereas XRP suffered a loss of 24.17 percent. Similarly, bitcoin cash and EOS shed 14.38 percent and 6.02 percent respectively. All the top ten digital coin prices have dropped in the 24-hour period. The significant drop suggested wiping out of nearly $13 billion in value from the overall cryptocurrency market.
While the stock market plunge might have different reasons, the digital currency drop comes in the wake of fresh warnings issued by financial authorities on the rapid growth and possible threat to the economy. For instance, the International Monetary Fund said:
“Continued rapid growth of crypto assets could create new vulnerabilities in the international financial system.”
Mysterious huge transaction led Bitcoin to crash in price
A fresh Whale with no previous transactions moved over 22 100 BTC (138,691,008.22 USD) out of the wallet leading market to crash in price as supports wasn’t strong enough to handle this move.
Professionalize the Concept
Significantly, the plunge in virtual assets also comes amidst hopes that the regulators will professionalize the cryptocurrency trading and will encourage digital coin-associated exchange-traded funds (ETFs). However, the SEC has rejected a number of ETFs until now. This included Winklevoss twins backed ETFs. If this is the situation in the United States, other nations like China were harsh on virtual assets and cracked down time and again.
Another key development in the current year is that there was some high-profile hacking of digital coin exchanges apart from some bad actors taking the route of initial coin offerings (ICOs).
In a nutshell, there were more unfavorable events and factors that are dragging down the prices of digital currencies than any favorable factors. As a result, the pressures of holding the price steady have become a herculean task.