The cryptocurrency world has taken a massive hit, with every single major currency falling by more than 10% and a lot of the smaller ones falling by 20% or more.
Obviously, the biggest cryptocurrency can't escape these massive dives. Bitcoin has fallen by 12.76% over the past 24 hours according to CoinMarketCap, it is currently sitting at a price of US$8,812.28.
This is a huge drop compared to the price it was trading at only a couple of months ago when the price was sitting at above US$19,000. Most of the people who bought into the hype are now sitting on large paper(less) losses.
Bitcoin's 'market capitalisation' has been smashed down to $148 billion. Almost US$9 billion of trades occurred during the last day to send the price down.
This huge decline perhaps started with the speculative trading. Something that shoots up in price is very likely to come crashing down if there's no underlying reason for the value to stay high, such as profit growth.
The main catalysts for the drop is likely to be that Asian governments which are tightening the noose around cryptocurrency trading. Perhaps they're doing it to save regular 'investors' from dangerous scam coins. I think it's more likely that they don't want 'cash' moving across the border with no controls.
Both the Chinese and South Korean governments have made moves to ban cryptocurrency exchanges from operating, which is how most normal traders do their business of trading.
Even just today, there is news that the Australian government is looking at ways of how it can tax cryptocurrencies according to some sources.
Considering most cryptocurrencies were set up to avoid government interference and pave the way for these new-age currencies, it is ironic that regulation and laws are now smashing the value of the cryptocurrencies.
This could just be the latest set back in the rise of cryptocurrencies. They do often plunge and then go back up again. However, I think people will become sick of cryptocurrencies if they just keep going up and down. Cryptocurrencies are no longer the guaranteed winners they used to be.
I'd much rather stick to good, old wealth-generating stocks.
