Bitcoin Crashes Below $10,000 and Altcoins Tumble Wednesday, Markets Slowly Recovering
Editor's Note: The cryptocurrency market has recovered significantly just in the last couple of hours. There is speculation that this might have been a massive coordinated sell by the whales (big money Bitcoin players) and other VC/bankers who are eager to get into Bitcoin and other altcoins. It is possible that this was done to drive prices down in order to cause many panicked people to sell, and allow the whales to buy in again at much cheaper prices. Regardless of that speculation, South Korea has been inserting a lot of doubt recently by proposing a ban on cryptocurrency trading. Looking at some of the biggest exchanges, most sales seem to have come from South Korea.
The world’s most valuable cryptocurrency, bitcoin, has lost over half its value since it smashed the $20,000 barrier in mid-December. The price of the cryptocurrency dropped to $9,555 at 15:00 GMT on Wednesday.
“The cryptocurrency market is experiencing a serious attack from speculators,” Gleb Zadoya, head of analytics at Analitika Online said.
“The reason for the sell-off are reports on the strengthening of regulation by the Chinese and South Korean authorities. After that, the exchange rate of many cryptocurrencies fell below important psychological levels.”
On Tuesday, an official from the People's Bank of China said the country's centralized virtual currency trade needs to end, Reuters reported.
National and local authorities should ban venues that provide centralized trading of virtual currencies, including the largest one, bitcoin, PBOC Vice Governor Pan Gongsheng was quoted as saying.
“The financial work conference clearly called for limiting ‘innovations’ that deviate from the need of the real economy and escape regulation,” Pan said, according to a memo quoted by Reuters.
There have been reports that an increasing number of people were taking out mortgages to invest in bitcoin when it peaked at $20,000.
The collective market capitalization of all cryptocurrencies has dropped by more than $200 billion since Tuesday.