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This was the worst week for cryptocurrencies in 2018

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THE great cryptocurrency crash of 2018 is heading for its worst week yet.

Bitcoin sank towards US$4,000 and most of its peers tumbled on Friday, extending the Bloomberg Galaxy Crypto Index’s decline since Nov 16 to 23 per cent. That’s the worst weekly slump since cryptomania peaked in early January.

After an epic rally last year that exceeded many of history’s most notorious bubbles, cryptocurrencies have become mired in a nearly US$700 billion rout that shows few signs of abating. Many of the concerns that sparked the 2018 retreat – including increased regulatory scrutiny, community infighting and exchange snafus – have only intensified this week.

Even after losses exceeding 70 per cent for most virtual currencies, Oanda Corp’s Stephen Innes has yet to see strong evidence of a capitulation that would signal a market bottom. “There’s still a lot of people in this game,” Mr Innes, head of trading for Asia-Pacific at Oanda, said from Singapore. If bitcoin “collapses, if we start to see a run down toward US$3,000, this thing is going to be a monster. People will be running for the exits.”

Mr Innes said his base-case forecast is for bitcoin to trade between US$3,500 and US$6,500 in the short term, with the potential to fall to US$2,500 by January.

The largest cryptocurrency retreated as much as 7.6 per cent on Friday, before paring losses to 4.1 per cent at 4.43pm in Hong Kong, according to Bloomberg composite pricing. At US$4,244, it is trading near the lowest level since October 2017.

Rivals Ether, XRP and Litecoin all declined at least 5 per cent. The market value of all cryptocurrencies tracked by CoinMarketCap.com sank to US$138 billion, down from about US$835 billion at the market peak in January.

The rout’s biggest casualties: individual investors who piled in just as prices peaked, and companies like Nvidia Corp that supplied the crypto ecosystem. The California-based chipmaker has lost nearly half its value since the start of October as demand for its cryptocurrency mining chips collapsed and results in its gaming division disappointed.

The economic impact of the crypto collapse has so far been limited, in part because most major banks and institutional money managers have little to no exposure to virtual currencies.

For most investors, recent declines in equity markets have arguably been far more important: the US$700 billion slump in digital assets since January compares with US$1.3 trillion lost from the market value of global shares just this week. 

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One Response

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    mahesh Kumar Reply

    I am reading this blog from so many months..It is giving good information about Crypto currencies

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