over 4 years ago • 2 mins
Cryptocurrency prices had their worst day in two months on Monday, with bitcoin shedding 4% and others – including bitcoin cash – dropping as much as 10% 🤦♂️
Cryptos rose a few weeks back after the Chinese government expressed a newfound enthusiasm for all things blockchain. But the initial excitement that China’s rising digital tide could lift cryptocurrency boats appears to have subsided.
Trading of bitcoin and other cryptocurrencies at major exchanges has dried up: while true volume is notoriously difficult to establish, the number of tokens changing hands at BitMEX appears to be at its lowest ebb in almost a year.
With little supportive news out there, investors may simply be taking some profit from their cryptocurrency holdings. And unhelpful news might also have encouraged selling: illusions that the Royal Bank of Canada was developing its own crypto platform were dispelled on Monday, with reports of an Alibaba crypto “partnership” also scotched.
Many observers are already pointing to the reward for mining bitcoin halving next May as the next big event in bitcoin investors’ diaries. But big blockchain events aren’t necessarily a good thing: bitcoin cash’s especially precipitous fall this week may be due to yet another contentious “hard fork” last Friday 🙄
Recent events are a useful reminder that cryptocurrency prices are volatile – particularly when trading volumes are low and any buying or selling whatsoever has an outsize impact.
While bitcoin has doubled in price this year, more traditional investments have also done well. As the US stock market hits new record highs, investors may be less keen on the uncertainty of cryptocurrencies – with bitcoin’s “digital gold” perhaps going the way of real gold.
And volatility isn’t confined to “first-wave” cryptocurrencies. A report from the US Federal Reserve released late last week outlined scenarios in which stablecoin issuers could see a catastrophic clamor from users seeking to cash out…
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