All Major Cryptos Trading Lower
Bitcoin is down over 1%, trading at $4136 at the time of this article. This slight decrease follows a major drop that saw the value of all major cryptocurrencies fall by 15%. Bitcoin fell from a high of over $5000 to under $4100 in less than a day.
This huge drop in prices was due to two reasons, both of them originating from China. First, the Chinese government banned ICOs (initial coin offerings) in China. Initial coin offerings are a way to raise money for crypto companies, similar to how Kickstarter works. The Chinese government believed there were too many scam ICOs so they banned all ICOs from occurring in China, with no exceptions. This saw the price of ethereum drop from about $395 to under $300 overnight as most ICOs use ethereum instead of bitcoin. However, ethereum was not the only cryptocurrency to drop as the entire market fell on after the Chinese announcement. Since then Bitcoin has stabilized, but the whole market is on edge waiting another Chinese announcement: there have been rumors of China shutting down all bitcoin exchanges in its territory and this has been corroborated by anonymous government officials. On the off chance that China does not shut down the exchanges, bitcoin is expected to somewhat recover. However, all signs are pointing to an imminent closure of Chinese exchanges which would lead to another drop for the entire cryptocurrency markets. The Chinese market for cryptocurrency is one of the largest in the world and without any access to exchanges, the market would be greatly damaged. There is not much change in the value of coins for the last few days because traders are waiting to hear the Chinese announcement. The market should be stable until the announcement, so it is a gamble buying or selling coins.