So, everyone is wondering what has been causing the downturn of the cryptocurrency markets. There are definitely a few major recent events that we can see correlate to the drop in prices.
The first major aspect could be related to the pioneer cryptocurrency exchange Mt.Gox, which closed in 2014 and filed for bankruptcy due to losing around 850,000 bitcoins.
One of the major players within the Mt.Gox exchange has now been said to be selling large number of bitcoins which the exchange still owned to pay back its previous creditors. As we all know, with the increase in selling, the price will encounter a dip.
There are several other factors that we can see are heavily affecting the price of cryptocurrencies, Bitcoin in specific. With the continued scams of initial coin offerings (ICO’s), CNBC reported that scammers have made off over $2 million in cryptocurrencies after moving forward with fake ICO’s.
As we all know, ICO’s can be either a hit or a miss. I wouldn’t necessarily say that they have been in majority scams, in fact there are a lot of small ICO’s with tremendous visions for the future of blockchain technology. The issue with the rise of ICO’s comes with the close eye of Government regulation. As we have seen in the recent Senate hearing in regards to cryptocurrency regulation, it is a large task to manage.
The digital-asset market got another working over from Washington when the Financial Services Committee had a hearing on cryptocurrencies and ICO markets. The committee met with some industry experts to ask and explore the regulatory issues the industry faces.
The hearing began with Democratic Rep. Brad Sherman calling all cryptocurrencies “a crock” and saying they are helping criminals and terrorists shift money around the world. The tensions grew when Michigan Republican Bill Huizenga, chairman of the subcommittee, stated his intention to push for greater oversight. Here is the following hearing, in which you can see @bradsherman, doesn’t seem to be a huge fan of cryptocurrencies.
Another reason the market could be amongst a downfall could also be correlated due to South Korean prosecutors actually raiding about three different cryptocurrency exchanges. These raids are apparently due to potential staff embezzlement with funds from customer’s accounts. This money was then funneled to purchase more cryptocurrencies within other exchanges.
The Seoul Southern District Prosecutors’ Office reportedly confiscated hard drives, mobile phones, and documents in the search for evidence. One prosecutor was quoted as saying:
“The firms turned up on our radar in January during our investigation of suspicious money transfers between Bitcoin exchanges that were detected during an audit by the Financial Services Commission and the Korea Financial Intelligence Unit.”
With all this being said, the market highlights of this week continue to show cryptocurrencies on a downfall. This is evident with Bitcoin’s slide lower then $8,000. Other cryptocurrencies are also seeing losses, which can always be anticipated when market makers like Bitcoin drop. Ethereum slid below $600 for the first time since mid-February. Ripple’s XRP token is down today as well, hitting $0.65 as of press time after trading above $0.70 for much of the day.