Cryptocurrency Meltdown Continues as Overheated Market Cools Down
Top cryptocurrencies slipped by 13 to 25 percent on Tuesday, as investors appeared to abandon digital assets. Leading cryptocurrency bitcoin has fallen to just under $12,000, representing a 40-percent drop from its record highs.
Bitcoin was trading at more than 13 percent down at $11,957 per token. Ethereum plunged 18 percent, ripple crashed 24 percent, while bitcoin cash plummeted 23 percent. Market capitalization of digital money has slid by 23 percent to $593 billion.
Bitcoin touched highs of $20,000 in December before plunging in the approach to Christmas. Its skyrocketing price last year has attracted institutional investors, but it has also resulted in increased control from regulators.
Last week, South Korea announced a crackdown on bitcoin and other cryptocurrencies, but backtracked after negative feedback from the public. China has already banned initial coin offerings and some other operations involving digital currencies. Russia is preparing legislation to regulate cryptocurrencies, which is likely to be introduced in the first half of this year.
Many cryptocurrencies are facing a ‘pump-and-dump’ strategy, which many will be familiar with from the movie, ‘The Wolf of Wall Street.’
Under this strategy, a specific stock is pushed hard and investors are promised large returns. After prices peak, the owner quickly sells as many shares as possible, sending prices down and enjoying the profits.