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It has been terrible 12 months to be a cryptocurrency speculator with many of the most popular rivals of the undisputed king of cryptocurrencies in Bitcoin producing some disastrous returns. While Bitcoin it is down 75% in 2018 which is nothing compared to some of the falls experienced by smaller cryptocurrencies. Take a look at some of the returns below:
- The Cardano price (ADA) is down 31% from last week and lost more than 90% of its value from the December 2017 peak
- The Monero the price fell 30% in the last week and lost almost 90% of its value since December 2017
- The Tron the price fell 28% in the last week and lost more than 90% of its value since December 2017
- The Ripple the price fell 5% in the last week and lost more than 80% of its value since December 2017
- The Bitcoin money the price fell 55% in the last week and lost more than 90% of its value since December 2017
- The litecoin the price fell 26% compared to last week and since December 2017 it has lost almost 90% of its value
- The Ethereum the price fell 28% in the last week and has lost almost 90% of its value since December 2017
So, what's going on with the lower prices of cryptocurrency?
The first point to note is that the sentiment around digital currency valuations is generally driven by the king of criptos in Bitcoin which has a market value of around US $ 85 billion.
This is more than the 9 largest combined digital currencies (including all those listed above) and as such cryptos tend to move to the unison with Bitcoin, which we know has consistently dropped in 2018.
Minor cryptocurrencies are also more volatile as they are less liquid than Bitcoin for less buyers and sellers in general. Because such small changes in supply or demand can greatly exaggerate price movements, compared to Bitcoin which is "relatively stable".
Digital currencies also decreased for many other reasons, including:
- The imminent bifurcation of Bitcoin money is causing problems within the encryption and administration communities that could lead at a run down
- The encrypted ones have not been widely accepted by regulatory authorities
- The sentiment that drives the question has become negative
- The encrypted ones have not been widely accepted by banks or other large companies
- Cryptographic exchanges have been the object of high-profile "hack" in 2018, leading to the theft of investor funds
The purchase of digital currencies is not for the faint of heart as their wild price movements make it similar AfterPay Touch Group Ltd (ASX: APT) appear to be stable blue chips.
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Motley Fool's collaborator Yulia Mosaleva has no position in any of the stocks mentioned. Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all have the same opinions, but we are all convinced that, considering a diversified range of insights, we have become better investors. Motley Fool has a disclosure policy. This article contains only general investment advice (with AFSL 400691). Authorized by Scott Phillips.
