For traders and miners of cryptocurrency, yesterday was a day in which their digital wallets shrunk just that little bit more.
In just a span of an hour and a half yesterday afternoon, Bitcoin went into freefall. The value of the digital currency fell from an approximate RM56,000 to RM42,000 before ultimately stabilising around the RM43,000 mark.
And it wasn’t just the value of Bitcoin that was affected either; the value of other major cryptocurrencies such as Ethereum, Ripple, and Litecoin also suffered from the drop, while other less popular cryptocurrencies saw their values lose half their value.
To break it down a step further, Ripple lost nearly 40% of its value on the market, while Ethereum had its value drop by 26%.
There are a multitude of reasons that may explain the sharp decline. The first reason falls under restriction and regulations of two countries: South Korea and China. South Korea, in particular, is seeking to ban the digital medium, primarily because of its decentralized nature, and the fact that it is untraceable. It’s ironic, considering that it is one of many countries that are heavily invested in the trading of the cryptocurrency.
China has also been coming down hard on cryptocurrency activity, and it is also considering blocking domestic access to the foreign exchanges and platforms that allow for centralized trading.
To be fair, this isn’t the first time that the Chinese government has tried to impose a ban on the cryptocurrency, and despite its best efforts, the country still holds the title of having the largest mining community of Bitcoin worldwide.
At this stage, it is likely that the value of Bitcoin will fall even further, but how far and fast is anyone’s guess. But don’t be too disheartened if you’re a newcomer and you’ve already invested some money into the cryptocurrency. There’s talk in the Crypto Market subgroup on Reddit that a rebound is highly likely this April.
Naturally, this is all just speculation and heresay, so we do advise you to take this bit of news with the metaphorical grain of salt.
(Source: Reddit, The Next Web, Bloomberg (1) (2), Twitter, The Independent)
