The intricately webbed crypto network takes another toll as bitcoin prices dropped even further, below $6,000. This has butterflied down to dozens of smaller digital tokens and initial coin offerings (ICO’s).
The largest digital currency fell as much as 6.2 percent to $5,887 as of 10:44 a.m. in Hong Kong, the lowest level since June, according to Bloomberg composite pricing. Other currencies followed suit, ether sank 12 percent, while all but one of the 100 biggest cryptocurrencies tracked by coinmarketcap recorded declines over the past 24 hours. The total market capitalization of cryptocurrencies dropped to $190 billion, from a peak of around $835 billion in January. This bubbling may have settled down a notch, crypto hype remains intact as bitcoin makes yet another headline.
While bitcoin and all its nemesis rallied in July on hopes that a bitcoin backed exchange traded fund would attract new investors to the world of virtual currencies, U.S. regulators have yet to sign off on multiple proposals for such a product. Their mood and inclination has affected the market performance of Bitcoin and all other coins undoubtedly.
The SEC postponed its decision on whether to approve the bitcoin ETF, this has left a bad taste in the mouths of the investors. It has been more than a blow to bitcoin bulls who had bet a green light from the regulator would help sustain last month’s tenuous rally. Optimists were counting on the wider adoption of cryptocurrencies to support prices, but regulators and many institutional investors have remained wary amid concerns over security and market manipulation. The effect has spread across networks, as people read all currencies synonymous to bitcoin.
The volatile market was on a high, rising up, expected to touch the moon in several ways. However, the SEC regulations and their opposing effect may have neutralized any fame that Bitcoin was harboring. The letdown has coincided with growing concern that entrepreneurs who raised crypto-denominated funds via ICO’s are now cashing out of coins such as Ether. This has festered one too many problems for the crypto world to face.
Bitcoin has now dropped about 23 percent in August, extending its retreat this year to 58 percent. Bitcoin’s value has slumped by about two-thirds since December.
Now, after its 66-percent price drop from December highs, comes yet another foot stomping plot twist for investors. The Chinese company that makes most of the world’s bitcoin mining rigs along with piles of mining and crypto-trading profit is thinking about a stock-market listing. The proceeds would be used to develop the kind of sophisticated hardware that would let it compete head-on with tech giants like Google in areas way beyond bitcoin. This leaves people shooketh on the subject whether crypto is on a high or a low as stats show.
Ether’s slump means that the low faith is a uniform for all crypto currencies. The extension of the fall in the SEC trust in cryptocurrencies can be seen in demand patterns across crypto networks. Bitmain is rumored to cash out. ICO’s are seen as a major catalyst for crypto propagation and they have taken the biggest hit of the year.
Despite the plunge, Bitmain had a lot of resources to back it up in times of contingency. An IPO could value Bitmain at $40 billion, or 20 times this year’s unverified forecast earnings of $2 billion. That wouldn’t be far off the earnings multiples of established chip makers Advanced Micro Devices Inc. and NVIDIA Corp, whose own share prices have been boosted by the popularity of their chips with the crypto crowd. And yet, it has been on the look out for selling itself. The topsy-turvy crypto landscape has been harsh for new entrants and the pressure is on the ever high.
Only a clumsy conclusion can be drawn based on the mixed signals that the industry has been sending out to all parties invested and attentive on all matters crypto.