In just a period of 24 hours, the majority of the cryptocurrencies including Bitcoin, Etherium, and Litecoin values fall more than 20% with Bitcoin dropping below the US$6,000 mark during the afternoon yesterday, February 6. Bitcoin already fell below the US$8,000 mark three times for the past four days. Global total cryptocurrency value lost an estimated $500 billion more or less within 24 hours. Back in December, Bitcoin hit a record-high on the 17th of December acquiring a value of US$19,535.70 which began declining since then.
Reference: https://www.gdax.com/trade/BTC-USD (February 6, 2018)
Factors Affecting Decline
Main factors that affect the value of cryptocurrency are regulations that restrict and control cryptocurrency like Bitcoin. The news about South Korea banning cryptocurrency traders seems to have significantly contributed to the further decline of Bitcoin value where a sharper decline can be observed.
Tougher regulations are in the works in different countries which determines the acceptance of cryptocurrency and the support or restraint on mining. Recently, China and India further threaten the existence of cryptocurrency. Indian Finance minister Arun Jaitley stated last January that India does not consider cryptocurrencies legal tender and aims to eliminate the use of cryptocurrencies. China, on the other hand, prepares to restrict Bitcoin mining by regulating power usage.
Last month, Tokyo-based cryptocurrency exchange Coincheck disclosed that a hacker stole around US$532 million worth of virtual NEM coins which surpasses the Mt. Gox heist back in February 2014. In such events, the legitimacy of cryptocurrency as a legal tender becomes more questionable.
Cryptocurrency might be the most unstable holder of virtual value to date. On the brighter side of things, the cryptocurrency crash might just normalize the stock of graphics cards in the market as the current exchange and trend discourage further investments in mining. Experts are both optimistic and doubtful about the future of cryptocurrency.