More than 60 percent of the 1450 cryptocurrencies listed on the Coinmarketcap Index saw red numbers on Tuesday evening and Wednesday morning, falling more than 13 percent in total. Bitcoin, Ethereum and Ripple the top three tokens on the index were among those that dropped the most at 18.45%, 14.81% and 39.07% respectively in twenty-four hours.
The market capitalisation of the top cryptocurrencies went down in excess of 10 percent. At one point, on Tuesday, the total market capitalisation for all 1,450 tokens lost nearly $200 billion, falling from $710 billion to $536 billion at its lowest.
The price of bitcoin plummeted by over $1,300 within 1.5 hours and hit $11,980.47 from $13,210 on the Coindesk Index on Tuesday morning. As at time of writing, the price has gone down to $10,162.59. It is the first time; bitcoin is going below $12,000 since December 5, 2017.
Interestingly, data from CryptoCompare showed that brisk exchange of South Korean won accounted for about 4 percent of bitcoin trading volume while the US dollar to bitcoin trading had the largest share at 40 percent.
Trading in Ethereum also dropped over 20 percent to settle at $912.94 as at the time of writing on the Coindesk Index.
Ripple, the world’s third-largest cryptocurrency by market capitalisation fell to the low of $1.08 at 12:22 p.m. on Wednesday which represents a 43.53 percent decline in seven days and 21.48 percent drop in twenty-four hours.
Mounting pressure from many countries’ regulators attempting to rein an explosion of speculation in virtual currency is believed to be behind the latest decline in value of cryptocurrencies. South Korea’s minister of justice announced sometime last that his ministry was planning a bill that could put an end to trading of cryptocurrencies through exchanges. However, other ministers are believed to have prevailed on the government to soften their stance.
But the fear of ban still hovers over the community. Kim Dong-yeon, the South Korean’s Minister of Finance disclosed in an interview with a local radio station that there is irrational speculation in the market, hence rational speculation was needed.
China also has plans to escalate its clampdown on cryptocurrency trading by targeting online platforms and mobile apps that offer exchange-like services, according to a report from Bloomberg.
There are indications that the United States government has become active in cryptocurrency regulation as BitConnect shut down operations citing warnings from regulators.
“We have received two Cease and Desist letter, one from the Texas State Securities Board, and one from the North Carolina Secretary of State Securities Division,” the BitConnect team revealed in a post.
Analysts also believe that the value of bitcoin, the leading virtual currency, is dropping as research increase into rival names from Bitcoin Cash and Stellar to sub-$1 billion coins like Ox, Qas, even Golem.
Ndubusi Ekekwe, a Nigerian tech entrepreneur and scholar, noted in a recent post that the price drops are expected.
“You do not buy bitcoin and peers with cows or sands, you need real money. So, if those exchanges cannot have access into the financial system, people would neither invest nor redeem. It is simple: a banned exchange will not wire money and cannot issue redeemable cheques. No bank would honour its cheques and no bank would allow it to withdraw cash from its account. Even you cannot send money to the exchange since when you send the real money, it must hit the real bank account before you see the digits in your account. Dealing with exchange and platforms for exchange is the way to regulate this,” he said.