By Edward Trotter
Cryptocurrencies in and their overall capital value have dropped by £100m in just 24 hours, leaving investors shocked and disillusioned and the sudden drop in value.
Bitcoin’s value dropped for the first time in 11 weeks dipped below $8,000 in the midst of a broader cryptocurrency sell-off.
The digital asset fell as low as $7,882 on Friday, according to Coinbase data. The sharp fall is the first time it has dropped below the $8,000 level since November 24, according to CoinDesk which tracks prices from digital currency exchanges Bitstamp, Coinbase, itBit and Bitfinex. The price of bitcoin lifted to almost $8,800 later Friday morning.
A number of investors have also expressed concerned about the price of bitcoin other virtual assets being propped up by Bitfinex, one of the exchanges included in CoinDesk’s Bitcoin Price Index.
Both Bitfinex and Tether- the digital currency backed by the executives of Bitfinex have been mired in controversy following the report. Tether, which is pegged to the U.S. dollar was down by almost 1.9 percent on Friday.
CONCERNS
Concerns have grown over suggestions that the price of bitcoin has been propped up by popular exchange Bitfinex.
On Wednesday, Indian Finance Minister Arun Jaitley warned against criminal activity associated with cryptocurrencies, and said that India would “eliminate” the use of cryptocurrencies in “illegitimate activities.”
Critics have expressed strong scepticism against the likes of bitcoin because of high fluctuations in price and concerns about fraudulent activities, including money laundering.
High among those critics is J. P. Morgan, Chief Executive Jamie Dimon called the world’s largest cryptocurrency, bitcoin, a “fraud,” and said that he thought it would eventually “blow up.”
Meanwhile, Berkshire Hathaway Chief Executive Warren Buffett told CNBC last month that cryptocurrencies were likely to “come to a bad ending.”
DOWN
On a 24-hour basis, the cryptocurrency is down 14 percent, according to data source OnChinaFX.
BTC prices on Korean exchanges are now trading at a discount to prices on western exchanges. For instance, BTC is changing hands at $8,227 on Coinbase’s GDAX exchange, while on Bithumb, it’s at $7,960. So, prices on Korean exchanges are trading at a discount of more than $250.
Up until December, the premium on Korean exchanges (known as the “Kimchi premium”) was so high that it caused the global average price of bitcoin to plummet, experts from coindesk informed theeyeofmedia.com.
The source told theeyeofmedia.com ” the situation with bitcoin is becoming so unpredictable, but there are top gurus benefiting from the whole affair. Korean prices have been dropped from average calculations, now there is a logic to the whole thing which is marginalizing a lot of interested parties, and benefiting others greatly”.
Ripple’s XRP token has depreciated by 31 percent in the last 24 hours. Ethereum’s ether token, bitcoin cash, NEO, and litecoin are down at least 20 percent each.