As we’ve emphasized before and the cryptocurrency market has proven, when the value of an asset depends entirely on a subreddit believing in you, that asset’s price is going to be a wild ride of high highs and painful lows. Once again, Bitcoin seems to have underscored this point — losing 10% of its value in an hour and a half today.
According to Coindesk, once trading opened, things did not go well for Bitcoin investors:
The cryptocurrency opened today’s session at $13,585, and reached a high of $13,601 before the sudden tumble at soon after 07:00 UTC that saw the price drop from $13,210 down to $11,850 at 08:30 UTC. That’s a fall of $1,360 in just 1.5 hours…At press time, bitcoin had recovered slightly, and was trading at $12,195 – down 10 percent for today, according to CoinDesk’s Bitcoin Price Index.
As for what fired up the selloff, it appears investors are anxious over how a few Asian countries will crack down on the currency. China is already apparently planning to shut down mining and transaction operations within its jurisdiction, which would cost the network 70% of its mining and transaction capacity. And it increasingly looks like South Korea might shut down cryptocurrency operations within its border as well. The other option for Bitcoin traders is Russia, and not unreasonably, most investors are a bit leery of getting in bed with a kleptocracy under U.S. sanctions that has all but publicly admitted it’s looking at cryptocurrency as a money-laundering tool. Or, hey, there’s always North Korea!
In other words, nobody quite knows how the market will react to regulations in other countries, who will pick up the slack, or whether or not it will be worth doing business with them. This particular roller coaster is just getting started.
(via Coindesk)