All the major cryptocurrencies are tanking. The severe price correction is leading to lots of questions whether the cryptocurrency could ever be reliable. But before you get all your hopes down, we have the likely reasons why it’s going badly for the cryptocurrencies these days.
About the price correction, Bitcoin price fell down 12.7% in last 24 hours. The price has fallen down by 40 percent just alone in a month. It’s currently at $12062. The combined market cap for all the currencies was $830 billion a week ago; now, it’s $570 billion. Other major cryptocurrencies have also experienced a price decline. Ripple fell down to $1.35 per coin which is a 26.8% fall. Ethereum also fell down by 18.8% to $1,082.
The price correction could be a result of a combination of factors but the most significant one is South Korea’s announcement of putting a permanent ban on cryptocurrency trading. Justice Minister Park Sang-ki made the initial statement but later other government branches confirmed that the ban isn’t finalized. However, such incidents do add to the skepticism about cryptocurrencies’ success.Samir Tabar
According to the CEO of CryptoCompare, the price adjustment has been due to the unclear future of cryptocurrencies in Asia. He believes that Asia, and particularly Korea, have been strong protagonists of the cryptocurrencies. With them getting out of the picture, the cryptocurrencies are experiencing a price fix as “uncertainty is spooking the markets”. He also mentioned that the cryptocurrencies were traded in Asia at a premium which really boosted the prices.
But more trouble is there lurking for the cryptocurrencies as Metropolitan bank banned all the cryptocurrency-related wire transactions. The bank did so as a result of an international fraud to one of the bank’s clients. Metropolitan bank has been referred to as the “Bitcoin bank” in the past because of its strong client list of cryptocurrency owners.
Looking at the past, this has been a normality for the cryptocurrency prices to fall mid-January. Same happened last year when the total cap declined from 21.9 billion on January 5 to 14.4 billion on January 12. The cryptocurrencies shrank until it felt an upward trajectory eventually.
It’s fascinating to derive such a correlation but just considering the price drop to be seasonal dip could be quite dangerous. The cryptocurrency market has definitely grown in the last few years but so have the stakes gotten higher.
Note: All content is original & written by NewsCrux Team.