It’s been a disappointing past week for cryptocurrency holders as the digital currencies have tumbled across the board.
In fact the king of cryptocurrencies, Bitcoin has plunged 13% over the last 7 days to sell for US$5,680 this afternoon at a price fractionally above a 52-week low.
However, its ‘forked’ spin off Bitcoin Cash has fared even worse to tumble 27% over the past week in a move many digital currency experts have attributed to another fork in Bitcoin Cash being on the horizon.
Another two of the worst performers have been Litecoin and Ethereum that are down 17% and 15.3% over the last week, so let’s take a look at what might be behind these big falls.
Is another Bitcoin derivative as it was forked from Bitcoin in 2011.
Remarkably in December 2017, at the height of the cryptocurrency mania, it reached prices above US$360 a coin, but now sits at just US$44 a coin meaning it has lost close to 90% of its value over just the last 11 months.
According to Investing.com Litecoin now has a market value of around US$2.57 billion, which is equal to its current price multiplied by the number of coins in circulation at 59.18 million.
Litecoin’s creators claim it offers faster transaction processing times than Bitcoin as its blockchain can handle higher payment volumes than Bitcoin. It also claims to be a leader in letting users deploy it to make payments for common goods and services.
Is still the third largest cryptocurrency platform with a market value around US$18.5 billion, but shockingly it has now also lost nearly 90% of its value since hitting highs around US$1,380 a coin at the start of January 2018.
Today it’s selling for just US$181 a Ether coin at near a 52-week low. The supply of Ether was originally supposed to be capped at 18 million Ether per year, but according to its website that limit is unlikely to be kept for differing reasons.
The huge falls suggest the price of Ether is largely driven by sentiment as speculators buy or sell based on the short term moving average direction of the currency.
Of the most popular digital currencies only Ripple has avoided double-digit losses over the last week, although it’s still down nearly 5.4% in 7 days and more than 80% from highs hit in January 2018.
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Motley Fool contributor Yulia Mosaleva 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.