Last Tuesday, the cryptocurrency market slumped again after four weeks of small but steady gains. The important thing was that the market seemed to be moving in the right direction.
The market capitalization started on Tuesday at $510,163,000,000.00, but hours later the losses started, closing at $472,877,000,000.00. The slump continued on Wednesday, and at the moment of writing this story on Thursday evening, the capitalization rose to $431,355,000,000.00.
In a matter of 48 hours, the main digital currencies lost all the momentum they gained over the last four weeks:
- Bitcoin: Feb. 20 $11,957.40 USD – Feb. 22 $10,055.00 USD
- Ethereum: Feb. 20 $962.44 USD – Feb. 22 $816.52 USD
- Ripple: Feb. 20 $1.17 USD – Feb. 22 $0.932976 USD
- BTC Cash: Feb. 20 $1,558.18 USD – Feb. 22 $1,208.84 USD
- Litecoin: Feb. 200 $252.60 USD – Feb. 22 $ 194.97 USD
That's how the market’s five main cryptocurrencies were affected. But 98 percent of all the digital currencies suffered the same fate.
There are no apparent reasons for this new turbulence, but there are always factors that can influence the markets.
One possibility might be the statement from Mark Carney, governor of the Bank of England, who said about Bitcoin that “It has pretty much failed thus far on... the traditional aspects of money. It is not a store of value because it is all over the map. Nobody uses it as a medium of exchange”, Carney told students at London’s Regent’s University, as reported by Reuters.
The news coming from South Korea might have also affected the market. Three weeks ago, the Asian country issued a statement saying that some exchange regulations would be enforced. But Bussines Korea quoted a government official on a story published last February 11, saying: “A virtual currency accounting standard is still in the draft stage. We need to discuss more about it”. This model would be similar to the one in New York, which grants a selective permit known as “BitLicence”.
This factor opened a new and promising outlook for digital assets. However, days later The Wall Street Journal reported that Jung Ki-joon died at home victim of cardiac arrest; he was 52. Ki-joon spearheaded Seoul’s regulatory repression on cryptocurrencies, and to this day nobody has been appointed to take his place or which approach will be assumed on the issue.
But the strongest theory might be that due to the digital market gains in recent weeks, those who invested over that period got good enough profits and wanted to cash out.
Now we've gotta be patient again while the market regains strength, so the investors keep taking advantage of this growing, new economy.
By Omar Cortés