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Ethereum is the second biggest cryptocurrency out of the hundreds of options. However, the bigger they come the harder they fall in market capitalisation terms.
The ethereal-sounding cryptocurrency’s market capitalisation has plunged below $100 billion to $94 billion. This was caused by a stunning 15.71% drop over the past 24 hours.
It’s not the only one. Bitcoin was crushed 13.76%, Ripple has crashed 24.58%, Bitcoin Cash has fallen 19.37% and Cardano has been decimated 29.56%.
Ethereum has been seen as a safe haven in recent times because Ethereum is used as a main instrument for initial coin offerings, however that hasn’t saved it from the onslaught over the past day.
Over the past couple of months the following chain of events has caused the long-term price declines:
The Chinese and South Korean governments have both made moves to ban cryptocurrency trading, which has seriously hurt the hype surrounding the cryptocurrency market.
US$534 million in NEM was reportedly stolen from a Japanese cryptocurrency exchange which affected 260,000 customers, I’m sure this made a lot of Japanese traders think twice about trading.
Facebook has banned all initial coin offering (ICO) advertising, supposedly to save people from falling for cryptocurrency scam coins.
India’s finance minister, Arun Jaitley, reportedly told lawmakers in New Delhi yesterday that he will “take all measures to eliminate use of these crypto-assets in financing illegitimate activities or as part of the payment system”.
You’d be right thinking that each of these bad pieces of news affects the whole market negatively. It’s a negative spiral of bad news which is sending the values down further and further. Without any sort of revenue or cash flow it’s hard to see all of the cryptocurrencies recovering in the long run.
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.