The Crypto Market’s $100 Billion Wipeout

Crypto investing is only for the strong of stomach.

All major cryptocurrency coins have tumbled in price in the last 24 hours amid rumors the bitcoin price was manipulated by major exchange Bitfinex. According to CoinMarketCap, the total market capitalization of all cryptocurrencies fell by $112.6 billion from the day before. Bitcoin has dropped below $9,000 as traders rushed to sell. Other major coins including Ethereum and Ripple also lost serious value in the last 24 hours of trading. The massive falls have been linked to several overlapping sources.

Tighter cryptocurrency regulation imminent

The cryptocurrency world has been gripped by rumors from major trading countries that a ban on cryptocurrency trading platforms will be enforced. Chinese, South Korean, and Indian governments have all expressed ideas about a future ban on trading and other regulations.

In addition to these regulation threats, word has been circulating that trading platform Bitfinex has been manipulating the price of Bitcoin. The New York Times reported that many in the industry were concerned that Bitfinex was propping up the value of bitcoin by buying large amounts of the currency with their own issued coin, Tether. The Times said, “In recent months, however, many investors have been raising alarm bells about Tether. Hundreds of millions of dollars worth of new Tether were created; almost always when the prices of other virtual currencies were heading down. The Tether was used on the Bitfinex exchange to make big purchases of Bitcoin and other tokens, helping push their prices back up, according to multiple analyses of data from Bitfinex.”

To further shake the industry Bitfinex was subpoenaed by the Commodity Futures Trading Commission last year. Details of the subpoena are not allowed to be released publicly, but the news may have motivated some traders to sell off their cryptocurrencies.

Full story at Interesting Engineering


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