Is the Sky Falling on Crypto Land?
All top 20 virtual currencies are in the red
PHOTO CREDIT: Getty Images
It’s seemingly turbulent times in the cryptocurrency space, with the top 20 virtual currencies by market capitalization in the red, falling by at least 14 percent to an excess of 26 percent, in the case of QTUM, according to data from CoinMarketCap.
The crypto plummet that started yesterday saw Bitcoin fall $1,360 in just 1.5 hours, from $13,601 to $11,850, putting the price of BTC at a month low. Bitcoin was also seen tumbling 28 percent late yesterday to below $10,000 on Coinbase, while Ethereum plunged by 30 percent to below $1,000.
The news comes after South Korea reportedly expanded its crackdown on crypto exchanges. A Reuters report reveals the nation’s largest cryptocurrency exchanges—Coinone and Bithumb—were raided by police and tax agencies this week for alleged tax evasion. The raids follow moves by the finance ministry to identify ways to tax the market, which is now as big as the nation’s small-cap Kosdaq index in terms of daily trading volume.
China, which implemented a ban on ICOs last year, is also more aggressive in its clampdown on cryptocurrency trading, particularly online platforms and mobile apps that offer exchange-like services. There have also been reports saying South Korea, China and Japan are considering a shared approach to regulation.
The move has preempted some investors to cash out their virtual currencies. Data from CoinMarketCap.com showed that, at one point within the 24-hour period, the overall market capitalization for all tokens had lost nearly $200 billion, falling from $710B to $536B at its lowest.
As if cryptocurrencies weren’t already in the trenches, renowned American billionaire Warren Buffet, in an interview with CNBC, pointed out the recent craze over bitcoin and other tokens will “with almost certainty…come to a bad ending.” Adds Buffet: “When it happens or how or anything else, I don’t know. If I could buy a five-year put on every one of the cryptocurrencies, I’d be glad to do it but I would never short a dime’s worth.”
It’s not all flak crypto is getting, however.
Long-time bitcoin critic Jamie Dimon, CEO of JP Morgan Chase, backpedaled a bit on his earlier criticisms on cryptocurrencies.
In September, Dimon had called bitcoin a fraud. A day before Buffet’s comments, Dimon acknowledge in a Fox Business interview that “the blockchain is real. You can have cryptodollars in yen and stuff like that. ICOs…you got to look at every one individually. The bitcoin was always to me what the governments are going to feel about bitcoin when it gets really big. And I just have a different opinion than other people.”
Supporters are also rallying around cryptocurrency. Kay Van-Petersen, an analyst at Saxo Bank, who forecasted in December 2016 that bitcoin would reach $2,000 in 2017 (the cryptocurrency blew past that mark in May), predicts bitcoin could hit between $50,000 and $100,000 in 2018. Van-Petersen also asserts ethereum is likely to outperform bitcoin this year. “Ethereum came after bitcoin, it has a more unified leadership than bitcoin. They seem to be a bit further along the way in regards to forming the solution to scaling issues,” says Van-Petersen.
In an earlier interview with Inc. Southeast Asia, Dr. Julian Hosp, co-founder of TenX, a firm that wants to make it easier for cryptocurrency to be spendable, said a crash is actually inevitable. “What I see over the next years is still a very strong uptrend. I would take any bet within the next five years, we are going to see a massive implosion of the bubble—really big. I definitely think there’s going to be a massive setback—I’m looking forward to it. And then we are going to see a massive breakthrough,” stated Hosp.
BY Amanda Pressner Kreuser