Bitcoin Bloodbath Thursday: Price Nosedives As $53 Billion In Profit Taking Wiped Off Crypto Market Cap

Cryptodigit Market Cap

Bitcoin prices suffered a meltdown Thursday after bottoming out at $7,676 before recovering somewhat. In a sell-off that kicked into high gear yesterday, the market capitalization of the entire cryptocurrency market lost a whopping $53 billion in value.

The market cap of all the world’s virtual currencies totaled $319.9 billion as of this writing, down from $372.9 billion the previous day, according to CoinMarketCap.com.

Meanwhile, the price of one bitcoin token (BTC) hovered at $8,031 as of this writing, down 2.18% from 24 hours earlier. Not surprisingly, the prices for 8 of the top 10 most valuable cryptocurrencies all cratered since yesterday.

Ethereum Classic and Ontology were the only two virtual coins that managed to hang tough during this week’s sell-off.

Market observers are attributing the recent price drop to a decision by Google to ban cryptocurrency advertising on its platform. The ban takes effect in June. Scott Spencer, Google’s director of sustainable ads, said the ban was necessary to protect consumers from being scammed:

“We don’t have a crystal ball to know where the future is going to go with cryptocurrencies, but we’ve seen enough consumer harm or potential for consumer harm that it’s an area that we want to approach with extreme caution.”

The move follows a similar embargo by Facebook, which enacted a ban on crypto ads in January 2018.  (See more: Facebook Bans Ads for Cryptocurrencies and ICOs.)

Twitter CEO Jack Dorsey has yet to comment on the Google/Facebook crypto smackdown, leaving many to wonder what he will do on his massive social media platform. (See more: Google Crypto Ad Ban is Trouble for Twitter CEO Jack Dorsey.)

Bitcoin same fiat digital bookie scheme as SDRs

Is a Bitcoin Whale to Blame?

There are always rumors that bitcoin prices are being manipulated by “bitcoin whales,” or people who own large amounts of BTC. About 1,000 individuals/entities reportedly hold 40% of all the bitcoin in the world, so it’s no surprise they exert a disproportionate impact on BTC price movements.

Last week, one bitcoin whale admitted that he had sold about $400 million in bitcoin and Bitcoin Cash since September 2017, leading many to blame his “dumping” for the recent price drop. Nobuaki Kobayashi (pictured), a Tokyo-based attorney and bankruptcy trustee for the now-defunct Mt. Gox crypto exchange, is raising money to pay off Mt. Gox creditors.

Mt. Gox, which operated between 2010 and 2014, was once the world’s largest cryptocurrency exchange, handling 70% to 80% of all trading in the world. The platform went bankrupt in 2014 after it lost 850,000 bitcoins (worth about $500 million) due to a hack.

But this time, it’s probably more than just one bitcoin whale that’s making tidal waves in the opaque, unregulated crypto ecosystem. The market has increasingly come under regulatory scrutiny, both in the United States and in Asia as it generates nonstop headlines and investor interest in the digital asset class mushrooms.

While cryptos have their share of supporters and detractors, Allianz Global Investors — which has $583 billion assets under management — has joined the growing list of skeptics.

‘Bitcoin Bubble Will Pop’

Stefan Hofrichter, head of global economics and strategy at Allianz, said the media hype surrounding crypto will continue for some time, but he’s still convinced it’ll all come crashing down.

In a lengthy blog post, Hofrichter said bitcoin mania exhibits all the classic signs of a bubble that’s about to burst. (See more: Bitcoin Bubble ‘Probably Just About to Burst,’ Says Allianz Global.)

“It appears to us that bitcoin mania is a textbook-like bubble – and one that is probably just about to burst. As a currency and asset class, bitcoin has potentially fatal flaws – which is why we believe it’s a matter of when, not if, the bitcoin bubble will pop. Its trajectory resembles a textbook case of a financial-market bubble, and it is lacking several key qualities that would qualify it as a currency. “

The good thing about a bitcoin bubble bursting, says Hofrichter, is that it won’t have much effect on the “real world” because it’s still a relatively small asset class — for now.

“Bitcoin’s demise would have few spillover effects on the ‘real world,’ since the market for this cryptocurrency is still quite small in size,” Hofrichter reasoned. “As a result, we believe that the risks to financial stability stemming from bitcoin are negligible – at least as of today.”

So is Hofrichter right? It’s way too early to say.

Investing in cryptocurrencies and Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual’s situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns no cryptocurrencies.

Investopedia

Related News:

  1. Dark Pools In Cryptocurrency Trading Is Increasing
  2. Nearly Half Of All Cryptocurrency ICOs Have Already Tanked
  3. Silver & Gold Is THE END POINT Of This Monetary Revolution
  4. Hungary Demands €1BILLION Refund From Brussel’s European Union
  5. Japan Shuts Down Cryptocurrency Exchanges Following $530 Million Dollar Cyber Heist

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s