The cryptocurrency market has been battered lately. Friday was no exception. Major coins plunged as billions of dollars of value vanished. Bitcoin continued its crash as the bear market refused to be ignored.
What Is the Deal With the Cryptocurrency Market?
Thursday was a tough news day in the cryptocurrency space. Bad news flowed from both South Korea and Japan. Bithumb was hacked and Japanese regulators swooped down on exchanges.
First, South Korea. I’ve previously talked about hackers attacking Bithumb. To refresh your memory, about $30 million was reportedly stolen. The hackers targeted customer wallets. Bithumb quickly announced they would reimburse clients for their losses. Nonetheless, The Korean Ministry of Science and ICT has launched a full investigation.
I also previously talked about regulators in Japan putting pressure on exchanges. Japan’s FSA (Financial Services Agency) ordered six major cryptocurrency exchanges to improve their operations. The FSA said bitFlyer, BTC Box, Bit Point, Tech Bureau, Bit Bank, and Quoine needed to up their security. Money laundering and terrorist funding concerns motivated the FSA to act. A deadline was given to the exchanges to submit their improvement plans.
Now here’s some minor news I have not mentioned. Over 200 BTC and ETH crypto mining platforms in China were apparently stealing electricity. They were all seized by Chinese authorities. This was more bad news in an already rough week.
Markets Reacted Badly
On Friday, cryptocurrency markets took a major tumble. Over 11% of value disappeared. 11% of this class of assets equals about $17 billion. That means about $17 billion was lost in one 24-hour day.
Every single one of the top four cryptocurrency coins suffered. Below you will see the losses of each and the significant price points they dropped under. The numbers reflect a 24 hour period from Thursday evening to Friday evening.
Coin Percentage Loss Key Number Crossed
Bitcoin (BTC) -7.5% $6500
Bitcoin Cash (BCH) -8.5% $750
Ethereum (ETH) -7.7% $475
Litecoin (LTC) -7.8% $85
Those percentage losses over that period of time cannot be ignored.
The Bitcoin Plummet
The price points are telling too. As of this writing, Bitcoin has dropped all the way down to the $6100 neighborhood. That means it is down 60% just this year. Could $5000 be far away? The picture is bleak across Bitcoin. And the picture is bleak across the entire asset class.
But is it really?
While it looks like the sky is falling, we cannot be sure if it is or if it is not. Since the beginning, there has been much volatility in the cryptocurrency market. Bitcoin, itself, is extremely volatile.
It wasn’t long ago that all the talk was of the meteoric price rise of Bitcoin.
As anyone involved in trading knows, past performance is not indicative of future results. That phrase, taken out of the SEC “rulebook”, refers to traditional investments. It certainly applies to cryptocurrency investing too.
The cryptocurrency exchanges run 24 hours a day, 7 days a week. As anyone following cryptocurrency markets knows, the current bearish can reverse at any moment. That is the well-known volatility of the cryptocurrency market.