The price of bitcoin drops to around 4,000. dollars. This is the lowest level since October 2017. Even a week ago, the most popular cryptocurrency cost 35% more. What factors caused such drastic discounts?
The value of the entire market decreased by about 650 billion dollars (from nearly 800 to just 145 billion dollars). Bitcoin itself was worth five times as much at its peak as today, and ethereum, the third-largest cryptocurrency, even ten times. The numbers are impressive…
Huge falls coincided with the so-called Bitcoin cash hard fork, the introduction of new software that de facto splits the cryptocurrency into two. Such treatment is usually a big element of uncertainty, which is why before the split planned for November 15, some market participants preferred to secure and limit cryptocurrency investments.
For several months, cryptocurrencies have also been exposed to the specter of lawsuits, which the SEC (the US counterpart of PFSA) allegedly prepares against many entities associated primarily with ICO, i.e. the public offer of a cryptomone. Last Friday, the day after the hard fork, the SEC announced that the companies Airfox and Paragon Coin. Inc. they will have to pay 250,000 dollars compensation to investors for not registering their ICOs as securities. They will also have to register their tokens (from ICO) as securities.
Registration means more restrictions, which ICO was practically deprived of before. The chances of the SEC preparing further penalties have now risen and in practice will bind the hands to the next entities. Some investors and entities to anticipate this move also probably reduce their exposure to cryptocurrencies, which further increases the sales wave.
Although it seems that “hard fork”, SEC sentences and fast cryptocurrency in connection with ICO are the main reasons for the current sales, it should not be forgotten that the entire last two months have been close to the lowest levels since November. r. The period of low but stable quotations was brutally ended, the overlapping of negative factors and the breakthrough of further psychological barriers (first 6,000, and then 5,000 dollars), which further accelerated the sell-off.
The high variability from which cryptocurrencies are known has returned, at least for the next few weeks. Although we can, and most likely will, at some point observe the rebound and price increases, the speculative nature of these movements means that the price of bitcoin within a week can reach 3,000. down, but it’s good to go back to 6,000 Here, however, it is worth recalling that in mid-July last year bitcoin cost less than 2 thousand dollars. Thus, the inheritance potential is still large.