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.
HODL may still pay off
Despite cryptocurrencies continued poor form and lack of trust with the industry, some financial experts believe holding tight will pay off eventually. Tom Lee, from Fundstrat, said the low was a good opportunity for investors to get into the cryptocurrency market. He described the $9,000 price as a "major low" and "the biggest buying opportunity in 2018." Kay Van-Petersen, a Saxo Bank analyst and longtime supporter of cryptocurrencies recently told online media that they believe bitcoin could hit between $50,000 and $100,000 this year.
Bitcoin regulation threats spur sales
The future of trading in Korea, China and India still hangs in the balance. India is the latest country to threaten tighter regulation of the industry. "The government does not recognize cryptocurrency as legal tender or coin and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system," India’s Finance minister, Arun Jaitley said last week. However, in a similar move to South Korea, he went on to say the Indian government will commit funds and resources to research the cryptocurrency technology blockchain." The government will explore the use of blockchain technology proactively for ushering in digital economy,” he said. All sides of the industry will be keeping a close eye on the price of major coins as more details emerge about Bitfinex.