This bitcoin crash really hurt, because it was kind of unexpected, abruptly wiping off $63 billion from the currency’s market cap, in less than 24 hours, from $373bn Wednesday down to $310bn today, according to Coinmarketcap.com.
CNBC said that the plunge of Bitcoin Thursday came amid closer regulatory scrutiny and after Alphabet-owned Google, world’s largest advertiser, announced plans to ban advertising related to the sector.
Bitcoin traded as low as $7,676 on Thursday, the lowest since February 8, according to CoinDesk data.
What other factors came into play?
One reason for the selloffs according to CNBC was “weariness over increased regulatory scrutiny of initial coin offerings (ICOs). But also bear signals spooking highly liquid investors who are looking to cut their losses.”
“At the same time, there have been continued instances of scams in the ICO market,” said CNBC who recently reported how scammers made off with over $2 million in cryptocurrency after carrying out an apparent fake ICO.
UK’s daily the Guardian reported that Christine Lagarde, the head of the International Monetary Fund has called for a crackdown on bitcoin by using the technology behind the digital currency to “fight fire with fire”.
She said failing to contain the development of cryptocurrencies is opening the door for it being “a potentially major new vehicle for money laundering and the financing of terrorism”.
China, Russia and South Korea have already initiated a number of crackdowns on currency exchanges.
BTC/USD fell dramatically February 6, also hitting the $5922.
Help on the way
Industry site Cryptovest reported that Thomson Reuters has launched the Bitcoin Sentiment Gauge.
“Mass media and information firm Thomson Reuters is set to help cryptocurrency investors make all the right moves by launching a tool which will track and analyze news and social media websites to gauge the online chatter and sentiments on Bitcoin,” said the site.
Thompson Reuters has unveiled a new version (version 3.0) of a tool called MarketPsych Indices, which is run jointly by Thomson Reuters and MarketPsych Data LLC.
“This tool will use AI to scan more than 400 websites, to gauge online themes and sentiments regarding Bitcoin,” said Cryptovest.
“This sentiment data feed is bound to prove invaluable for investors seeking to identify the right opportunities to buy and sell in the volatile and highly unpredictable crypto market, allowing them to maximize returns and manage their portfolios more efficiently.”
The net is a good gage of sentiment.
Within the past few months, for example, a report by Bloomberg revealed that the Google searches for “Bitcoin” declined as Bitcoin’s price dropped.
The emotional rollercoaster people go through translates into investors becoming “bitcoin bulls” when times are good, or “Nocoiners” when bear times arrive.
“On social media, there’s often palpable anxiety regarding the dramatic bitcoin price movements that occur after major events such as hacks, thefts, exchange crackdowns and closures.”
Reward: $250,000 if hacker found
The Financial Times (FT) reported that Crypto exchange Binance offers $250,000 for info on hacking suspects.
“Binance, one of the world’s biggest digital currencies trading venues, has turned to cyber vigilantes to find help tracking down the people who attempted a “large-scale” hack attempt March 7th, 2018 that it claims to have thwarted,” said FT.
The reward is payable in digital Binance coins, rather than dollars.
“Binance said it has allocated $10m worth of “crypto reserves” for “future bounty awards against any illegal hacking attempts on Binance.”
Coincheck, a Japanese exchange, earlier this year faced a $500 million hack.