MENU

Why the bitcoin (BTC) price was smashed overnight

In morning trade the crypto market is rebounding after sizeable declines during U.S. trade overnight.

At the time of writing the entire market value is US$313.8 billion, up almost US$10 billion in a matter of two hours according to Coin Market Cap.

What happened?

Overnight the bitcoin (BTC) price was crushed after Twitter announced plans to follow in the footsteps of Facebook and Google by banning cryptocurrency advertising on its platform.

After announcing its plans a Twitter spokesperson told CNBC that: “We are committed to ensuring the safety of the Twitter community. As such, we have added a new policy for Twitter Ads relating to cryptocurrency. Under this new policy, the advertisement of Initial Coin Offerings (ICOs) and token sales will be prohibited globally.”

The reaction to the news was extremely negative and traders initially hit the sell button en masse, causing the BTC price to fall over 8% to below US$8,000.

It has since rebounded from this sell-off and has narrowed its decline to under 4% at US$8,228.04 per coin.

I think this was a predictable rebound considering bitcoin doesn’t need to advertise and therefore the bans have little impact on its prospects.

In fact, the move is likely to be a positive for the world’s largest cryptocurrency. By preventing ICOs from advertising it lowers the chances of traders being burned from making highly risky investments elsewhere in the hope of striking gold.

While it may be a positive for bitcoin, it is likely to be a negative for some of the smaller altcoins on the market such as EOS (EOS), Cardano (ADA), NEO (NEO), and IOTA (MIOTA) which struggle to gain as much attention and may need to resort to advertising. These altcoins have understandably fallen more than most today and are yet to rebound as strongly.

What now?

At this stage I feel that sentiment is at a crossroad and could go either way from here. While I think the odds are in favour of prices rebounding further, there’s no guarantee that they will.

I would suggest that any investors looking to buy bitcoin only put in what they can afford to lose.

Don’t Buy A SINGLE Cryptocurrency Until You Read This

While conflict overseas is all media talking-heads seem to mention these days, the billionaire founder of Tesla is losing sleep over what he sees as a far bigger threat.

Elon Musk Warns: This has “vastly more risk than North Korea”

If you missed your opportunity to get in on Google, Microsoft, or Amazon in their early days, don't let it happen again. This emerging technology trend could offer a second chance for anyone who wishes they took part in these millionaire-maker stocks.

Click here to discover more!

Motley Fool contributor James Mickleboro 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 Scott Phillips.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.