Bitcoin fell below $10,000 for the first time since November, as a sell-off in cryptocurrencies continued for a second day.
Cryptocurrency sell-off continues as bitcoin, ethereum sink
Meanwhile, ethereum and ripple — the second and third-biggest digital assets respectively — continued to move lower. According to CoinMarketCap data, ethereum was trading almost 29 percent lower at $791.97 a coin. Ripple on the other hand fell 34 percent to about 91 cents.
“The action we’re seeing may seem dramatic but is really quite normal for this market,” Mati Greenspan, senior market analyst at eToro, told CNBC via email. “All in all, this drop has brought us back to the prices that were traded about a month ago for most coins.”
Greenspan said Tuesday that South Korean and Japanese investors often pay a premium of “20 percent or more per coin,” but on Wednesday said they appeared to be falling.
“The premiums that were being paid by Japanese and South Korean crypto traders is also coming down, so that’s a good sign as well,” he said.
‘No other justification than fear’
China was also reportedly looking to deepen its crackdown on the cryptocurrency market this week. On Monday, Bloomberg reported that authorities in China were planning to block domestic access to Chinese and offshore cryptocurrency platforms that allow centralized trading. Regulators will also target people and companies that provide market-making, settlement and clearing services for centralized trading, the publication said, citing unnamed sources.
Charles Hayter, chief executive of CryptoCompare, said that many expected the cryptocurrency market to decline.
“The market was very overheated and had significantly dislocated from trend. A large percentage of investors were expecting this correction and reversion to mean.”
Hayter said that panic was “leading the herd to sell with no other justification than fear,” but added that it was “difficult to say” where the market would be headed next.
Bitcoin and other cryptocurrencies are extremely volatile assets. Many experts believe that the introduction of futures contracts for bitcoin from the likes of CME and Cboe would tame the digital currency somewhat and bring in more institutional money.
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