Why is all crypto down today? While there are a number of potential reasons, one of the most likely culprits is simply that the market is correcting after a period of sustained growth. However, with the recent launch of a number of new projects and positive news announcements, the market may rebound soon.
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It’s been a tough day for cryptocurrency investors.
The value of Bitcoin, the best-known and most widely traded digital currency, fell sharply on Friday, CNBC reported. As of 3:30 p.m. ET, Bitcoin was trading at $7,988.10, down more than 11 percent from its price 24 hours earlier.
Other digital currencies also tumbled Friday. Ethereum, the second-largest cryptocurrency by market value, was down more than 12 percent, while Ripple’s XRP token was down more than 9 percent.
The sell-off appears to have been triggered by a report from Bloomberg that Goldman Sachs is putting plans to open a cryptocurrency trading desk on hold. The report cited people familiar with the matter and said the bank is still interested in the technology that underlies cryptocurrencies but has concluded that “the regulatory environment remains uncertain.”
Bitcoin is down 3% today.
The fall comes as a surprise to many, as Bitcoin had been on a tear lately, climbing back above $4,000 just a few days ago.
So what’s behind the sudden drop?
There are a few possible explanations:
1) The SEC’s decision to delay its decision on a Bitcoin ETF could be spooking investors. A Bitcoin ETF would make it much easier for institutional investors to get exposure to Bitcoin, and there was a lot of anticipation that one would be approved this month. Now that approval has been pushed back, at least for the time being, it’s possible that some investors are taking their money out of Bitcoin.
2) Another possibility is that we’re seeing some profit-taking after such a big run-up in price. After all, Bitcoin is up nearly 50% from its lows just a few weeks ago. It’s not uncommon for investors to take profits after such a big gain.
3) It’s also worth noting that there has been some negative news recently about Tether, which is pegged to the US dollar and used by many cryptocurrency exchanges as a way to offer USD-denominated trading pairs. There have been concerns that Tether isn’t actually backed 1-to-1 by USD reserves, and if those concerns turn out to be true, it could lead to chaos in the cryptocurrency markets. Tether is down 5% today, which could be contributing to the overall sell-off in crypto.
Whatever the reason, it’s always important to remember that the cryptocurrency markets are highly volatile and anything can happen at any time. If you’re investing in crypto, you need to be prepared for big swings up or down.
Ethereum is down today because of a variety of factors. First, the overall crypto market has been down in recent days. This is likely due to a combination of profit-taking by early investors, concerns about regulation, and general market volatility. Secondly, Ethereum specifically has been under pressure due to a range of issues including the ongoing debate about its scalability, delays in implementation of its roadmap, and concerns about its governance. These factors have all combined to lead to a sell-off in Ethereum in recent days.
Litecoin is a cryptocurrency that is similar to Bitcoin in many ways, but with a few key differences. Litecoin was created in 2011 by Charlie Lee, a former Google employee. Litecoin is often referred to as the “silver to Bitcoin’s gold.”
While Bitcoin has a total supply of 21 million coins, Litecoin has a total supply of 84 million. This difference results in faster transaction times and lower fees for Litecoin.
Litecoin is also mined using a different algorithm than Bitcoin, called Scrypt. This allows for mining with less expensive hardware than would be required for Bitcoin mining.
Today, Litecoin is down 3.5% against USD.
Bitcoin Cash (BCH) is a cryptocurrency that was created as a result of a fork of the Bitcoin blockchain on August 1, 2017. The fork occurred at block 478,558 and split the Bitcoin network into two separate networks: the original Bitcoin network with its upgraded protocol (now Bitcoin Cash) and the new Bitcoin network with its legacy protocol (now simply referred to as “Bitcoin”).
Bitcoin Cash was created to address some of the limitations of the Bitcoin network, namely scalability. The developers of Bitcoin Cash increased the block size from 1 MB to 8 MB in order to allow for more transactions to be processed per block. This had the effect of increasing the overall throughput of the Bitcoin Cash network and reducing transaction fees.
As of May 2020, Bitcoin Cash is ranked 4th by market capitalization among all cryptocurrencies, with a market cap of $5.4 billion.
From what we can gather, the market is down today because of a couple of reasons. One, the SEC is still undecided on whether or not to allow a Bitcoin ETF. This has caused some uncertainty in the market. Secondly, South Korea’s new regulations are causing some selling pressure. Lastly, it seems that some big investors are taking profits after the recent run up in prices.