Bitcoin Drop Biggest of year
The largest cryptocurrency in the world tumbled by around 15%, going below $6,000 and reaching the lowest level in more than a year. It was Bitcoin’s biggest drop since February. In the past few months, the cryptocurrency has been less volatile than earlier this year. According to reports, BTC suffered most of the loss during a half-hour window. Last month BTC lost its $13 billion of value in a matter of just a few minutes. Apart from Bitcoin, other major digital currencies to take a blow included Ethereum (ETH), and Ripple (XRP).
Other Digital Coins, Ripple (XRP) Drop 17%
The slump also hit other digital coins including Bitcoin’s smaller rivals like Litecoin (LTC), Ether (ETH), Ripple (XRP). Bitcoin Cash tumbled by around 21% and XRP stumbled by more than 17%. According to Michael Terpin, a partner at Puerto Rico-based Alphabit Fund, “The market is trying to find the bottom. People who are chartists look at historical patterns, and they note there’s one last final capitulation drop to get the last people fleeing out of the market.”
Some traders are of the opinion that the Bitcoin drop is due to investors abandoning their BTC position in order to raise capital in order to purchase Bitcoin Cash. The thought process is that the new coin will appreciate after the split. In December of last year, Bitcoin hit all-time highs – surging to almost $20,000. The digital coin’s value has come down by almost 70% from this record high.
It is quite possible that investors are keen to invest in buying new coins as two versions of Bitcoin Cash software are available. These two software packages will compete with each other and allow the market to establish dominance. There is a strong possibility that some of the miners can decide to switch from Bitcoin mining to Bitcoin Cash mining to offer support to one of the competing software packages. The founder of hedge fund Ikigai, Travis King, stated that when the hash rates come down, the security of the network inherently comes down thereby making the BTC cryptocurrency less valuable.
According to the founder of London’s Cryptocompare industry website founder, Charlie Hayter, more often when things happen, it takes time for the true reason to come to the fore whether it is because of exchange trade or due to any regulatory action. The analyst at a multi-asset online brokerage ThinkMarkets, Naeem Aslam said that the last few days revealed the way consolidation was taking place and the price was going downwards. Aslam further added that the drop of $6,200 is a fair indication that there are no buyers working on the sidelines at present. Other participants in the market think that the impending Bitcoin Cash split is the reason causing the sudden drop in Bitcoin.