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    TechCentralTechCentral
    Home » In-depth » It’s a bloodbath in crypto land

    It’s a bloodbath in crypto land

    By Agency Staff29 June 2018
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    Bitcoin’s meteoric rise last year had many observers calling it one of the biggest speculative manias in history. The cryptocurrency’s 2018 crash may help cement its place in the bubble record books.

    Down 70% from its December high after sliding for a fourth straight day on Friday, bitcoin is getting ever-closer to matching the Nasdaq Composite Index’s 78% peak-to-trough plunge after the US dot-com bubble burst. Hundreds of other virtual coins have all but gone to zero — following the same path as Pets.com and other red-hot initial public offerings that flamed out in the early 2000s.

    While bitcoin has bounced back from bigger losses before, it’s far from clear that it can repeat the feat now that much of the world knows about cryptocurrencies and people have made up their minds on whether to invest. Bulls point to the Nasdaq’s eventual recovery and say institutional investors represent a massive pool of potential cryptocurrency buyers, but regulatory and security concerns have so far kept most big money managers on the sidelines.

    Bitcoin declined as much as 4.2% to $5 791.19 on Friday, the lowest level since November

    “You’ll have to see the market reverse before you see” institutions pile in, Peter Smith, CEO of Blockchain Ltd, which introduced a crypto-trading platform for professional investors on Thursday, said in an interview on Bloomberg Television.

    Bitcoin declined as much as 4.2% to US$5 791.19 on Friday, the lowest level since November, according to Bloomberg composite prices. It traded at $5 894 as of 6.22am in New York, down 59% for the year and heading for a second-quarter loss of 14%. Other coins including ether and litecoin also slumped, while the combined value of tokens tracked by CoinMarketCap.com declined to $236-billion. At the peak of crypto-mania, they were worth about $830-billion.

    While it was difficult to find fresh catalysts for bitcoin’s drop on Friday, hacks at two South Korean exchanges and a regulatory clampdown in Japan have weighed on sentiment in recent weeks. Regulators around the world have stepped up scrutiny of cryptocurrencies on concern that they’re a breeding ground for illicit activity including money laundering, market manipulation and fraud.

    Lesser-known tokens have been hit the hardest. Dead coins lists around 800 that are effectively worth nothing, while coinopsy puts the tally at more than a thousand. Fewer than 4% of initial coin offerings raising from $50-million to $100-million were successful or promising, according to a March analysis from ICO advisory firm Satis Group.

    Bitcoin may not go to zero, but it’s “very much” a bubble, Robert Shiller, the Nobel laureate economist whose warnings about dot-com mania proved prescient, said in an interview with Bloomberg Television’s Tom Keene on Tuesday. Last year’s bitcoin surge was “not a rational response”, he said.  — Reported by Adam Haigh and Eric Lam, with assistance from Olga Kharif, (c) 2018 Bloomberg LP



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