On the first day of 2018, the cryptocurrency market had a capitalization of $594 billion USD, which caused frenzy among a huge number of investors. Millions of people had invested large amounts of money, which multiplied over a really short period.
A week later, on January 7, the capitalization reached $825 billion, sending investors to ecstasy. However, it wasn’t too long before those astronomic numbers took a dramatic downward path, which sent the market's capitalization to $225 billion by late March.
From that moment on, there have been just sporadic gains during this important downward trend. Today, we’ve reached the lowest capitalization in almost two years, barely $181.59 billion USD, losing 78% since its highest point on January 7.
For obvious reasons the cryptocurrency Top 10 shows widespread loses and is trying to bounce back after a nightmare-like Wednesday for digital investors around the globe.
The Bitcoin value _ still in red numbers _ was of $5,590 USD, losing $929 from last week. Actually, the number already represents a slight recovery since reaching its lowest point on Wednesday at $5,358 dollars.
Surprisingly, despite the global loses, XRP (Ripple) climbed to second place with a value of $0.46028, losing $0.049935 dollars.
Ethereum keeps disappointing investors, and fell to third place with a value of $180.07 dollars, losing $35.04 during the week.
Bitcoin Cash lost $182 dollars to $416. It must be noted that this cryptocurrency forked into Bitcoin Cash ABC and Bitcoin Cash SV (Satoshi Vision). Both already began circulating in different chains, in what’s been called “hashwar.”
Stellar also surprised by placing fifth and leapfrogging EOS with a value of $0.233413, despite losing 0.025357 USD.
Who is responsible of the plunge?
We’ve previously talked about how insisting in not boosting the Bitcoin platform could translate in disaster at any time, which finally happened. But the top cryptocurrency also dragged down the rest of the digital coins.
The Bloomberg website painted a daunting picture, saying the collapse is consequence of a technical failure that could take months to solve.
“This week’s breakdown produced significant technical damage that will likely take weeks, if not months, to repair to create a durable enough price ‘structure’ to support a multi-month rally,” said Rob Sluymer, with Fundstrat Global Advisors.
The slump affected stock of companies related to cryptocurrencies, like the Japanese SBI Holding and Monex Group (owner of the Exchange Coincheck), losing almost 2%.
On the other hand, Tom Lee said to CNBC: “I think it's the first time I've heard someone think that something could triple. I think I could have made a mistake (...) what I was trying to illustrate is that (...) applying the historical average of 2.5 times the cost of mining would imply a fair value of more than $20,000 _ approximately $22,000.”
During the CNBC interview, Lee stood by his forecast that Bitcoin will finish the year at around $20,000 dollars.
By Omar Cortés