Following closer regulatory scrutiny on cryptocurrencies and announcement by Google about banning virtual currency ads, there was a sharp fall in the prices of major cryptocurrencies on Thursday.
According to Coinmarketcap.com, which tracks prices based on different exchanges, the market capitalization or the total value of all of the virtual coins in circulation currently came down from $372.9 billion a day before to about $310.4 billion on Thursday morning.
The price of bitcoin was as low as $7,676.52 on Thursday. It is the largest cryptocurrency in the world interms of market cap. According to CoinDesk data, the price was the lowest since February 8. But later the markt cap of cryptocurrencies went up to $331.7 billion and bitcoin prices rose to touch $8,219.77.
The fall in price of cryptocurrencies can be attributed to a number of factors.
The selling by the trustees by MtGox – the Japanese cryptocurrency exchange that has collapsed is the first reason. The exchange lost 850,000 bitcoins and applied for bankruptcy following its closure in 2014.
With the aim of paying back debtors, a large number of bitcoins that still lie with the exchange is being sold off by a trustee of the now-defunct exchange. And this has impacted the price of bitcoin.
On the other hand, announcement of a ban on all cryptocurrency related advertisements on all of its online platforms was announced by Alphabet owned Google which is also the largest digital advertiser by revenue volumes. Initial coin offerings (ICOs), wallets and trading advice are included in the ban.
"The sell-off was triggered by a number of factors, notably, weariness over increased regulatory scrutiny of ICOs, the Mt.Gox bitcoin dump and what seems to be some heavily liquid traders pushing for future buy-back opportunities," Thomas Glucksmann, head of APAC business development at cryptocurrency exchange Gatecoin, told the media.
"These bear signals have subsequently spooked many new crypto investors who are now looking to cut their loses."
On the other hand, the initial coin offering (ICO) market has seen a continuance of instances of scam. Reports about a $2 million fraud through an apparently fraudulent ICO emerged earlier this week.
One of the methods that start-ups make use of, to crowd-fund investment is an initial coin offering. Startups issue new cryptocurrencies in exchange for established virtual coins such as ethereum or bitcoin to investors in an ICO instead of stocks as is done in a conventional Initial Public Offering. The new digital coin is not equity but would be available with the investors to be used in the future to get services of the issuing company. There are also possibilities that the price of the new coin can climb higher than the price at the time of issuance.
The sector has also had the attention of regulators thee world over. cryptocurrency exchange Bitfinex, and Tether were subpoenaed by the U.S. Commodity Futures Trading Commission (CFTC) at the end of last year.
Calls for greater regulation on cryptocurrencies has been given by the Bank of England Governor Mark Carney. And while some cryptocurrency exchanges were forced to stop business, a number of such exchanges were issued punishment notices by regulators in Japan earlier this month.
(Source:www.cnbc.com)
According to Coinmarketcap.com, which tracks prices based on different exchanges, the market capitalization or the total value of all of the virtual coins in circulation currently came down from $372.9 billion a day before to about $310.4 billion on Thursday morning.
The price of bitcoin was as low as $7,676.52 on Thursday. It is the largest cryptocurrency in the world interms of market cap. According to CoinDesk data, the price was the lowest since February 8. But later the markt cap of cryptocurrencies went up to $331.7 billion and bitcoin prices rose to touch $8,219.77.
The fall in price of cryptocurrencies can be attributed to a number of factors.
The selling by the trustees by MtGox – the Japanese cryptocurrency exchange that has collapsed is the first reason. The exchange lost 850,000 bitcoins and applied for bankruptcy following its closure in 2014.
With the aim of paying back debtors, a large number of bitcoins that still lie with the exchange is being sold off by a trustee of the now-defunct exchange. And this has impacted the price of bitcoin.
On the other hand, announcement of a ban on all cryptocurrency related advertisements on all of its online platforms was announced by Alphabet owned Google which is also the largest digital advertiser by revenue volumes. Initial coin offerings (ICOs), wallets and trading advice are included in the ban.
"The sell-off was triggered by a number of factors, notably, weariness over increased regulatory scrutiny of ICOs, the Mt.Gox bitcoin dump and what seems to be some heavily liquid traders pushing for future buy-back opportunities," Thomas Glucksmann, head of APAC business development at cryptocurrency exchange Gatecoin, told the media.
"These bear signals have subsequently spooked many new crypto investors who are now looking to cut their loses."
On the other hand, the initial coin offering (ICO) market has seen a continuance of instances of scam. Reports about a $2 million fraud through an apparently fraudulent ICO emerged earlier this week.
One of the methods that start-ups make use of, to crowd-fund investment is an initial coin offering. Startups issue new cryptocurrencies in exchange for established virtual coins such as ethereum or bitcoin to investors in an ICO instead of stocks as is done in a conventional Initial Public Offering. The new digital coin is not equity but would be available with the investors to be used in the future to get services of the issuing company. There are also possibilities that the price of the new coin can climb higher than the price at the time of issuance.
The sector has also had the attention of regulators thee world over. cryptocurrency exchange Bitfinex, and Tether were subpoenaed by the U.S. Commodity Futures Trading Commission (CFTC) at the end of last year.
Calls for greater regulation on cryptocurrencies has been given by the Bank of England Governor Mark Carney. And while some cryptocurrency exchanges were forced to stop business, a number of such exchanges were issued punishment notices by regulators in Japan earlier this month.
(Source:www.cnbc.com)
