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More Blood for Cryptocurrencies: What’s the Cause?

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Top cryptos bleed

Breaking the cycle of alternate days of gains and losses, the cryptocurrency markets seem to have experienced an extreme downturn. Bitcoin, the largest cryptocurrency, was down 6.4% as of 8:00 AM EST today and was trading at $7,379.7 after reaching a low of $7,300. All the top cryptos have slumped substantially, with Etherum down 9.1% and trading at $568.7. Bitcoin Cash and Litecoin also tumbled about 6.6% and 6.1%, respectively.

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The price of Bitcoin Investment Trust (GBTC) was also down about 6.6% at the close of May 23, and it could react negatively to the routing prices of cryptocurrencies. Overstock (OSTK) and Square (SQ)(SPX), stocks associated with cryptocurrencies, also were up 0.25% and 0.84%, respectively, as of their close on Wednesday. The positive numbers for Overstock may be due to the US options exchange backed by Canada’s TMX Group saying it would team up with Overstock.com to create the first regulated exchange for security tokens.

The only three cryptocurrencies that managed marginal gains were Ox, Centrality, and Holo. These stocks were up 16.1%, 2.5%, and 1.1%, respectively. The worst performers were Skycoin, Polymath, FunFair, and Nuls, which have fallen 20%, 13.5%, 13.3%, and 13.1%, respectively.

Why the massive declines?

The massive fall in cryptocurrencies may have been due to the report that the US justice department had begun criminal investigations into potential price manipulation of several cryptocurrencies. Regulators around the globe have been increasingly seeking to control the risks inherent in cryptos.

Also, the alliance between the CFTC and the SEC to look into the possibility of any wrongdoing in the cryptocurrency space could be a major reason behind the choppy numbers. The CFTC released new guidance for listing cryptocurrency-related derivatives products.

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