Bitcoin prices went crashing today after the cryptocurrency market lost about £9.85billion ($13billion) in value but what has caused this sudden crypto price crash?
All Cryptocurrencies including Bitcoin (BTC), Ethereum (ETH) and Ripple’s XRP took a plunge on the crypto markets on Thursday, October 11.
According to a CoinDesk report, Bitcoin’s value crashed to around £303 ($400) in a matter of 30 minutes on Thursday morning. The crash came after recent warnings from financial authorities regarding the rapid growth of digital coins and the potential threat it poses to the economy.
BTC traded for £4,932.14 ($6,507) at 1.53am BST (12.53am UTC) before plunging down further to £4,645.05 ($6,128.24) by 2.26am BST (1.26am UTC).
Bitcoin is at the moment, trading at £4,723.21 ($6,231.35) at 9.41am BST (8.41am UTC) on CoinDesk, marking a 4.88 percent drop in the price.
The crypto’s market capitalization sustained huge losses – the digital token’s total market value.
Crypto trackers at CoinMarketCap reported that all the top 10 cryptocurrencies took a big hit during the last 24 hours.
Bitcoin’s market cap plunged along with the token’s value from a market cap of £85billion ($113billion) at 2.09am BST (1.09am UTC) to £81billion ($108billion) just six hours later.
As a result of the sudden tumble in value, the entire crypto market capitalization has gone down from £163billion ($216billion) at 1.37am BST (12.37am UTC) to £153billion ($203billion) by 3.17am BST (2.17am UTC).
At 9.52am BST (8.52am UTC) ETH is down to 10.78 percent, XRP is down 11.47 percent, bitcoin cash is down 11.51 percent and EOS is down 8.54 percent.
What caused bitcoin to crash?
According to CoinDesk, Bitcoin is currently trading at its lowest price since September 17,
The token’s erraticism continued gradually over the recent months, peaking at £6,365.95 ($8,398.63) on July 24 before dropping below to £4,699.44 ($6,200) on August 10.
In the wake of the massive crash, analysts have now warned the days of “playing safe” with cryptocurrency are over.
An analyst at investment platform eToro, Matthew Newton said: “This sell-off is just a return to the bear market of a few months ago. Falls like this are a sign that the markets are working, and investors are pulling their money out of over-valued projects. Of course, movement in the alt-coin market often spills over to other crypto asset markets, which is what we see here, particularly given that ethereum has been the driving force behind the market for the last few months.”
Analysts reprimanded that too many people without any sound “financial literacy” have jumped on the bitcoin bandwagon, including scammers and criminals, which has caused the currency to severely crash in just a couple of months.
The International Monetary Fund said in a recent report, “Continued rapid growth of crypto assets could create new vulnerabilities in the international financial system,”
All the evidence points towards the reality that bitcoin, XRP, and ethereum have not been able to recover the record highs set the end of 2017 and at the beginning of 2018.