Crypto Markets Keep Tumbling as Litecoin Falls and Paul Singer Calls Cryptocurrencies a ‘Scam’
Litecoin dropped almost 20 percent within the space of a day, with prices declining in the rest of the cryptocurrency market as well.
Litecoin had jumped as much as 10 percent on Tuesday following the occurrence of a "hard fork" on Sunday. A hard fork is a substantial divergence in the protocol of a blockchain network. These events result in the creation of a new blockchain, and therefore a new cryptocurrency.
Holders of a cryptocurrency get one new digital coin for every unit of the cryptocurrency they own, following the occurrence of a hard fork.
Litecoin dropped to as little as $208.93, approximately a 17.7 percent drop from yesterday's high of $253.90, CoinMarketCap figures show.
"The pullback in Litecoin is indicative of the general market pullback," said Charles Thorngren, CEO of Noble Alternative Investments.
Bitcoin’s price also reversed trajectory this morning despite market dominance rising and transaction fees dropping, echoing the rest of the market. The cryptocurrency simply shed gains after crossing the $11,000 mark two days ago.
Bitcoin was also simply following the market during its recent declines, analysts claimed. The total market value of digital currencies has declined more than 10 percent within 24 hours.
Ripple drops despite good news
Ripple also plunged today, trading at $1.02 in the morning, down 4.44 percent in the last 24 hours.
Ripple has been testing the psychological $1.00 support, which analysts say may trigger more panic selling. There have been many news stories about Ripple's partnership deals with major payment services providers and even with the Saudi central bank. But traders do not necessarily view Ripple’s cooperation with financial companies as positive for XRP.
This is because most of the joint projects announced in the last couple of years are based on xCurrent technology, which does not require the cryptocurrency. XRP token is used only on the xRapid platform.
Cryptocurrency “equivalent of nothing”
The declines in the cryptocurrency market come after another volatile day on Wednesday, when one of the world’s largest hedge funds, Elliott Management, described cryptocurrencies as “one of the most brilliant scams in history".
The fund, founded by billionaire Paul Singer in 1977, dedicated three pages to describing its negative view of cryptocurrencies in a quarterly letter to clients, the Business Insider reported.
In the letter, Elliott Management claimed that people “encountering cryptocurrency have switched from sense of WTHIT (What the hell is this?)” to a stable FOMO (fear of missing out). Elliott stated that cryptocurrency investors were buyers of a “black box” which will, according to the firm, turn out to be empty.
The firm said that cryptocurrency was the “equivalent of nothing” and the desire to invest in it was an “indication of the limitless ignorance of swaths of the human race”.
“This [cryptocurrency] is not just a bubble. It is not just a fraud. It is perhaps the outer limit, the ultimate expression, of the ability of humans to seize upon ether and hope to ride it to the stars... "
It continued: “This [cryptocurrency] is not just a bubble. It is not just a fraud. It is perhaps the outer limit, the ultimate expression, of the ability of humans to seize upon ether and hope to ride it to the stars... "
"But is it not glorious that when the equivalent of nothing attracts priests and parishioners who run up the price, the very willingness of the mob to buy it at higher and higher prices is seen as validation of the thing, rather than an indication of the limitless ignorance of swaths of the human race?”.
Elliott managed $34.1 billion as of January 1, 2018 and the Elliott Associates LP fund provided returns of 8.7 percent last year. The number of digital currency-based hedge funds grew to about 130 from 30 in 2017.