Bitcoin, which has been remarkably stable for a number of months, has suddenly lost more than 5% of its value, causing other major cryptocurrencies, including ripple (XRP), ethereum, stellar, litecoin, EOS, and bitcoin cash to plummet along with it.
Earlier this month the bitcoin price hit a 17-month volatility low but that period of calm now appears to be over, with the bitcoin price taking a hit that wiped billions of dollars from its market capitalization within minutes, according to CoinDesk data.
Short, sharp changes in the bitcoin price are often attributed to either trading bots initating a buy or sell order that then gets picked up by others causing a domino effect on the price, or by so-called whales (large holders of a cryptocurrency or other asset) buying or selling a big enough chunk at under or above the current market rate.
This causes the market rate of the asset to suddenly move in the direction of the sale, often causing havoc for exchange operators.
Shortly after the initial bitcoin price nose-dive, it did somewhat recover — clawing back a couple of percent. Bitcoin was earlier today trading at around $6,500 — where it has been for the past couple of months. It breifly fell to $6,125 but then recovere to near $6,200.
YOU MAY ALSO LIKE
Bitcoin's recent ebbing price has been put down to a fall in trading volume since its peak at the end of 2017 — something that has hit cryptocurrency exchanges around the world, promting some businesses to cut costs and lay off staff.
Many investors are also waiting on regualtors and the established financial services industry to show their cryptocurrency hands before deciding whether to cash in or double down on their investments.
The U.S. Securities and Exchange Commission is still weighing whether to grant approval to a closely-watched bitcoin exchange-traded fund proposal, which could open up the bitcoin investment market to a raft of fresh capital.
Global regulators are meanwhile grappling with how to best limit bitcoin and cryptocurrencies use for illicit activities and protect retail investors from potentially high loses, while at the same time nurture the emerging bitcoin, blockchain, and cryptocurrency industries.
Of the top ten biggest cryptocurrencies, bitcoin cash, ripple (XRP), and stellar were the most heavily sold off.
