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The Bitcoin price has crashed 15% in 24 hours to US$6,963. At the moment, every day seems to herald another $1,000 level Bitcoin has dropped through.
The fall has meant that the Bitcoin market capitalisation now sits at US$116.5 billion, a long way below its all-time high.
Over US$8 billion has been traded over the past 24 hours, suggesting that a lot of people are just selling and getting back what they can from the cryptocurrency market.
Many cryptocurrency punters still seem to believe that the price will recover in the future, but I can’t see that happening any time soon. The drivers of the rise, mainly speculation and hype, have disappeared because everyone who was going to enter the market likely already has.
Indeed, not only that but some of the countries with the most excited traders have been banned from trading when the Chinese and South Korean governments announced they were going to ban cryptocurrency exchanges.
It gets worse when you add onto that the news that India’s finance minister was also talking about banning cryptocurrency trading, western banks blocking cryptocurrency buying on credit cards and Facebook banning cryptocurrency advertising.
I can’t see anything that will break this chain of bad news and terrible price drops for the cryptocurrency market. I expect prices could keep falling because there is no underlying asset where an investor can say it’s good value now. The theoretical ‘market’ doesn’t care about what an all-time price was or what you paid for it.
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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.