By
Godfrey Benjamin
May 10th, 2024
The overall cryptocurrency markets have corrected heavily in the last 24 hours as the crypto markets valuations have dropped to $310 billion.
Just when most of us were thinking that the cryptocurrency meltdown since the beginning of 2018 has almost consolidated, the market has some more surprises to throw at us! Yet another time the crypto markets are witnessing a heavy correction as the overall valuations of the crypto market drop down to just above $300 billion.
Bitcoin has slipped below the $8000 levels and is currently trading $7899.96, according to the data on CoinMarketCap. This a considerable 14% drop in its value the previous day. But it’s not just Bitcoin contributing to the market woes. All of the top 20 cryptocurrencies have corrected by more than 10% with the majority of them in the range showing 15-20% correction. Ethereum too has now slipped below $600, Ripple is trading 17% down at $0.65 and so on.
The recent correction in the crypto market is majorly attributed to the latest U.S Congressional Hearing held yesterday, on March 14, wherein many of the U.S representatives and government officials expressed serious discontent with the state of cryptocurrencies and asked for some serious regulatory measures to be introduced in place for protecting investors money. Recently, IMF chief Christine Lagarde proposed the idea of using the blockchain network itself in order regulate the crypto space.
Moreover, Bloomberg reported that investment firm Allianz said that Bitcoin has absolute zero intrinsic value and is a major bubble. Stefan Hofrichter, the firm’s global economics and strategy head said: “In our view, its intrinsic value must be zero. A bitcoin is a claim on nobody – in contrast to, for instance, sovereign bonds, equities or paper money – and it does not generate any income stream.
He further added that “Bitcoin’s demise would have few spillover effects on the ‘real world,’ since the market for this cryptocurrency is still quite small in size. As a result, we believe that the risks to financial stability stemming from bitcoin are negligible — at least as of today.”
Apart from this, some analysts in the cryptocurrency community have attributed the latest price fall in Bitcoin to Mt. Gox offloading $400 million worth Bitcoin in the recent times. Nobuaki Kobayashi, the Tokyo-based lawyer and trustee of the default Bitcoin exchange Mt. Gox, which filed for bankruptcy back in 2014, has clarified that the decision to sell was made in consultation with the courts.
However, even though the odds are against the crypto markets at the moment, there is some positive development also taking place in the crypto space. Fintech Startup Circle has recently provided access to all of its customers across 46 states of the U.S to its new cryptocurrency investing app that offers its customers with instant, commission-free cryptoasset trading.
On the other hand, popular crypto-trading exchange Binance also announced that it planning to launch its own blockchain network called as the Binance Chain and will be slowly transferring its operations on the trading platform to its decentralized network. Thomas Reuters has also announced that it will be launching a new Bitcoin Sentiment Data Feed that will help a majority of the crypto traders to follow the situation of the crypto market.
One of the most important news of the week is that South Korea is considering to remove a ban from ICOs in the wake of its new regulatory measures. This means that more liquidity in the crypto space but the news has, however, yet to reflect the positive move in the crypto market. Last year, in September 2017, South Korea has introduced a blanket ban of the operations of ICO in the country, sighting reasons of increasing fraud.
Moreover, since the beginning of 2018, the Korean government has been taking several regulatory steps to reduce the influence of crypto trading in the local investors due to increased reports of tax evasion and money laundering.